Chart Industries Inc (GTLS)
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 | 390,700 | 151,500 | 88,500 | 92,200 | 74,500 |
| Interest expense | US$ in thousands | 325,800 | 25,700 | 22,400 | 35,800 | 25,300 |
| Interest coverage | 1.20 | 5.89 | 3.95 | 2.58 | 2.94 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $390,700K ÷ $325,800K
= 1.20
Chart Industries Inc's interest coverage ratio has fluctuated over the past five years. In 2023, the interest coverage ratio stands at 1.45, indicating that the company's ability to cover its interest expenses with operating income has weakened compared to the previous year.
In 2022, the interest coverage ratio was significantly higher at 5.25, demonstrating a strong ability to meet interest obligations. The ratio was even healthier in 2021 at 8.30, reflecting a robust ability to cover interest payments with operating earnings.
In 2020, the interest coverage ratio was 6.11, which also showed a solid ability to meet interest expenses. However, in 2019, the ratio was lower at 3.20, indicating a comparatively weaker capability to cover interest costs with operating income.
The declining trend in the interest coverage ratio from 2021 to 2023 may raise concerns about the company's ability to comfortably meet its interest obligations. Further analysis of the company's financial health and operating performance is recommended to better understand the reasons behind these fluctuations and to assess the overall financial stability of Chart Industries Inc.