Healthcare Services Group Inc (HCSG)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 59,379 | 60,868 | 47,540 | 63,208 | 130,560 |
| Interest expense | US$ in thousands | 6,438 | 7,856 | 2,987 | 1,385 | 1,374 |
| Interest coverage | 9.22 | 7.75 | 15.92 | 45.64 | 95.02 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $59,379K ÷ $6,438K
= 9.22
Healthcare Services Group Inc's interest coverage ratio has shown a declining trend over the years, indicating a potential weakening ability to cover its interest obligations from its operating income. As of December 31, 2020, the interest coverage ratio was at a healthy level of 95.02, suggesting the company had substantial earnings to cover its interest expenses. However, by December 31, 2024, the interest coverage ratio had dropped to 9.22, signaling a significant decrease in the company's ability to meet its interest payments from its operating profits. This trend may raise concerns about the company's financial health and its ability to service its debt obligations efficiently in the future.