Geo Group Inc (GEO)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 229,218 | 356,340 | -1,476,760 | -1,545,270 | -1,721,150 |
| Interest expense | US$ in thousands | 190,624 | 218,292 | 164,550 | 129,460 | 126,837 |
| Interest coverage | 1.20 | 1.63 | -8.97 | -11.94 | -13.57 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $229,218K ÷ $190,624K
= 1.20
Geo Group Inc's interest coverage ratio has been in a declining trend over the past few years, reaching a low of -13.57 at the end of 2020 and further deteriorating to -11.94 by the end of 2021. This indicates that the company's operating income was insufficient to cover its interest expenses during these periods. The situation improved slightly by the end of 2023 and 2024, with interest coverage ratios of 1.63 and 1.20 respectively.
A negative interest coverage ratio suggests that the company is not generating enough operating income to meet its interest obligations, which can raise concerns about its financial health and ability to service its debt obligations. While the improvement in 2023 and 2024 is a positive sign, Geo Group Inc may still face challenges in managing its debt burden effectively and should continue to focus on improving its profitability and cash flow generation to ensure sustainable financial performance.
Peer comparison
Dec 31, 2024