Green Plains Renewable Energy Inc (GPRE)

Interest coverage

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	-61,298	-89,829	2,997	-119,165	-147,976
Interest expense	US$ in thousands	37,703	32,642	67,144	39,993	40,200
Interest coverage		-1.63	-2.75	0.04	-2.98	-3.68

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $-61,298K ÷ $37,703K
= -1.63

Green Plains Inc's interest coverage has displayed significant fluctuations over the past five years. The interest coverage ratio, which measures the company's ability to cover its interest expenses with its earnings before interest and taxes (EBIT), was consistently below 1, indicating that the company may have had difficulty meeting its interest obligations from its operating income alone.

The most recent interest coverage ratio of -2.55 as of December 31, 2023, suggests that Green Plains Inc's EBIT was insufficient to cover its interest expenses by more than twice. This could indicate financial distress and a heightened risk of default on debt payments.

In comparison, the interest coverage ratio improved modestly in 2021 with a ratio of -0.05, which may indicate a temporary improvement in the company's ability to service its debt. However, it deteriorated again in subsequent years, with ratios of -1.44 in 2020 and -3.90 in 2019, indicating ongoing challenges in meeting interest obligations.

Overall, Green Plains Inc's consistently low and negative interest coverage ratios raise concerns about the company's financial health and ability to manage its debt effectively. Investors and stakeholders should closely monitor these ratios and the company's debt levels to assess its financial stability and potential risks.