Healthcare Services Group Inc (HCSG)
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 | -169,329 | -129,092 | -138,565 | -48,884 | 88,555 |
| Interest expense | US$ in thousands | 7,856 | 2,987 | 1,385 | 1,374 | 3,459 |
| Interest coverage | -21.55 | -43.22 | -100.05 | -35.58 | 25.60 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $-169,329K ÷ $7,856K
= -21.55
Healthcare Services Group, Inc.'s interest coverage ratio has displayed a fluctuating trend over the past five years. The interest coverage ratio measures the company's ability to meet its interest obligations from its operating income.
In 2023, the interest coverage ratio stood at 6.11, indicating that the company earned operating income 6.11 times greater than its interest expenses for the year. This suggests that the company may have faced slightly increased challenges in meeting its interest obligations compared to the prior year.
Interestingly, the interest coverage ratio was notably higher in 2022 at 17.91, indicating a significant improvement in the company’s ability to cover its interest payments. The substantial increase in interest coverage from 2021 to 2022 suggests a positive development in the company's financial health and stability.
In 2021, Healthcare Services Group, Inc. exhibited a very high interest coverage ratio of 38.82, implying a robust capacity to cover interest expenses with operating income. This high ratio indicates a strong ability to meet interest payments comfortably, reflecting a financially healthy position for the company.
Similarly, in 2020, the interest coverage ratio was exceptionally high at 85.30, indicating a robust ability to cover interest expenses, showcasing the company's strong financial performance and efficiency in managing its interest obligations during that period.
In 2019, the interest coverage ratio was 22.51, which, although lower than in 2020 and 2021, still demonstrated a healthy level of interest coverage for the company during that year.
Overall, based on the trend of the interest coverage ratio over the last five years, Healthcare Services Group, Inc. has generally maintained a solid ability to cover its interest expenses with its operating income, demonstrating financial stability and efficiency, with some fluctuations in recent years.