GXO Logistics Inc (GXO)
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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 287,000 | 260,000 | 275,000 | 292,000 | 392,000 | 394,000 | 385,000 | 382,000 | 389,000 | 373,000 | 357,000 | 306,000 | 273,000 | 246,000 | 216,000 | 76,000 | 43,000 |
| Interest expense (ttm) | US$ in thousands | 103,034 | 162,000 | 131,000 | 111,000 | 111,000 | 62,000 | 54,000 | 49,000 | 29,000 | 24,000 | 23,000 | 20,000 | 21,000 | 22,000 | 23,000 | 22,000 | 24,000 |
| Interest coverage | 2.79 | 1.60 | 2.10 | 2.63 | 3.53 | 6.35 | 7.13 | 7.80 | 13.41 | 15.54 | 15.52 | 15.30 | 13.00 | 11.18 | 9.39 | 3.45 | 1.79 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $287,000K ÷ $103,034K
= 2.79
GXO Logistics Inc's interest coverage ratio has shown a varying trend over the analyzed periods. The interest coverage ratio indicates the company's ability to meet its interest payment obligations using its operating income.
From December 31, 2020, to September 30, 2022, GXO Logistics Inc experienced a consistent increase in its interest coverage ratio, reflecting an improvement in its ability to cover interest expenses. The ratio increased from 1.79 to 15.54, indicating a strong ability to meet interest payments and suggesting financial stability.
However, starting from December 31, 2022, the interest coverage ratio began to decline steadily. From 13.41 on December 31, 2022, it dropped to 2.79 on December 31, 2024. This downward trend may suggest a decrease in the company's ability to cover interest expenses as its operating income may not be growing at the same pace as its interest obligations.
The decreasing trend in the interest coverage ratio from 2022 to 2024 indicates a potential red flag as it may signal increased financial risk for GXO Logistics Inc. Further analysis of the company's financial performance and its ability to generate sufficient operating income to cover interest expenses would be advisable to assess its overall financial health and sustainability.
Peer comparison
Dec 31, 2024