Granite Construction Incorporated (GVA)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 244,927 | 207,461 | 162,116 | 67,103 | 65,638 | 56,524 | 33,268 | 64,680 | 81,817 | 40,863 | 38,950 | 48,554 | -18,020 | -27,109 | -73,921 | -107,113 | -112,574 | -89,769 | -40,660 | -62,145 |
| Interest expense (ttm) | US$ in thousands | 29,188 | 27,888 | 24,860 | 23,654 | 18,462 | 14,520 | 12,162 | 11,927 | 12,611 | 14,269 | 16,881 | 18,492 | 20,298 | 22,317 | 23,545 | 18,045 | 17,658 | 38,942 | 37,422 | 41,573 |
| Interest coverage | 8.39 | 7.44 | 6.52 | 2.84 | 3.56 | 3.89 | 2.74 | 5.42 | 6.49 | 2.86 | 2.31 | 2.63 | -0.89 | -1.21 | -3.14 | -5.94 | -6.38 | -2.31 | -1.09 | -1.49 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $244,927K ÷ $29,188K
= 8.39
Interest coverage is a key financial ratio that measures a company's ability to meet its interest obligations with its operating income. A higher interest coverage ratio indicates a better ability to cover interest payments, while a lower ratio suggests higher financial risk.
Looking at the historical trend of Granite Construction Incorporated's interest coverage ratio from March 31, 2020, to December 31, 2024, we can observe the following:
- The company's interest coverage ratio was negative for most of 2020 and 2021, indicating that the operating income was insufficient to cover the interest expenses during those periods.
- However, starting from March 31, 2022, the interest coverage ratio turned positive, indicating an improvement in the company's ability to cover its interest obligations.
- The ratio continued to increase throughout 2022 and 2023, reaching its peak at December 31, 2024, which suggests a stronger financial position and better ability to meet interest payments.
Overall, the upward trend in Granite Construction Incorporated's interest coverage ratio from negative to positive values reflects an improvement in the company's financial health and ability to meet its interest obligations over the analyzed period.
Peer comparison
Dec 31, 2024