Green Plains Renewable Energy Inc (GPRE)
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 | -47,459 | -61,298 | -89,829 | 2,997 | -119,165 |
| Interest expense | US$ in thousands | 6,677 | 37,703 | 32,642 | 67,144 | 39,993 |
| Interest coverage | -7.11 | -1.63 | -2.75 | 0.04 | -2.98 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $-47,459K ÷ $6,677K
= -7.11
The interest coverage ratio of Green Plains Renewable Energy Inc has been consistently low over the past five years. It stood at -2.98 in December 31, 2020, indicating that the company's operating income was insufficient to cover its interest expenses almost three times over. In the following year, the ratio improved slightly to 0.04, but still remained significantly below 1, suggesting a precarious financial position where the company only just managed to cover its interest payments. Subsequently, the ratio deteriorated further, reaching -2.75 in December 31, 2022, -1.63 in December 31, 2023, and plummeting to -7.11 in December 31, 2024.
The consistently low and negative interest coverage ratios of Green Plains Renewable Energy Inc indicate a concerning situation where the company's earnings were inadequate to cover its interest expenses and raise doubts about its ability to service its debt obligations. Investors, creditors, and other stakeholders may view this as a sign of financial distress and increased risk associated with the company's debt repayment capability. Management should closely monitor and address the company's financial health to improve its interest coverage and overall solvency.
Peer comparison
Dec 31, 2024