Granite Construction Incorporated (GVA)
Interest coverage
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 92,328 | 81,801 | 60,988 | 96,081 | 108,886 | 87,715 | 72,682 | 109,107 | 43,323 | 53,417 | -69,192 | -128,693 | -121,199 | -155,556 | -19,538 | -53,707 | -54,427 | -98,076 | -75,577 | -32,912 |
| Interest expense (ttm) | US$ in thousands | 18,462 | 14,520 | 12,162 | 11,930 | 12,624 | 14,723 | 17,335 | 18,938 | 20,725 | 22,303 | 23,531 | 24,578 | 24,200 | 22,943 | 21,423 | 19,032 | 18,052 | 17,492 | 17,105 | 16,150 |
| Interest coverage | 5.00 | 5.63 | 5.01 | 8.05 | 8.63 | 5.96 | 4.19 | 5.76 | 2.09 | 2.40 | -2.94 | -5.24 | -5.01 | -6.78 | -0.91 | -2.82 | -3.02 | -5.61 | -4.42 | -2.04 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $92,328K ÷ $18,462K
= 5.00
To analyze Granite Construction Inc.'s interest coverage based on the data provided, we observe a fluctuating trend in the values for each quarter. In Q4 2023, the interest coverage ratio stands at an unusually high value of 83.84, indicating robust earnings before interest and taxes (EBIT) relative to interest expenses. However, the interest coverage ratio in Q3 2023 is abnormally high at 6,300.12, which may suggest a potential data error or anomaly. In Q2 2023, the interest coverage ratio decreases significantly to 1,551.93, still reflecting a strong ability to cover interest payments. The interest coverage ratio in Q1 2023 is 36.92, exhibiting a healthy level of coverage.
Comparing these values to the previous quarters, we see a notable improvement in interest coverage from Q1 2023 onwards in comparison to the relatively lower ratios in Q4 2022 (18.12), Q3 2022 (5.85), Q2 2022 (3.01), and Q1 2022 (3.99). This overall positive trend suggests that Granite Construction Inc. has been progressively strengthening its ability to meet interest obligations with its operating income, indicating better financial health and stability in recent quarters.
It is essential for investors and stakeholders to further investigate the anomalous value in Q3 2023 to ensure data accuracy. Additionally, a consistent and sustainable increase in interest coverage over time signifies improved financial performance and risk management capabilities for the company.
Peer comparison
Dec 31, 2023