Hess Corporation (HES)

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	4,383,000	2,949,000	4,033,000	1,968,000	-2,378,000
Interest expense	US$ in thousands	412,000	478,000	493,000	481,000	468,000
Interest coverage		10.64	6.17	8.18	4.09	-5.08

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $4,383,000K ÷ $412,000K
= 10.64

Interest coverage is a ratio that measures a company's ability to cover its interest expenses with its operating income. It provides insights into the company's ability to meet its interest obligations.

For Hess Corporation, the interest coverage ratio has shown varying trends over the years:
- As of December 31, 2020, the interest coverage ratio was -5.08, indicating that the company's operating income was insufficient to cover its interest expenses during that period.
- However, there was a significant improvement in the interest coverage ratio by December 31, 2021, reaching 4.09. This suggests that the company's operating income improved relative to its interest expenses, indicating a better ability to meet interest obligations.
- The trend continued to improve in the following years, with the interest coverage ratios for December 31, 2022, December 31, 2023, and December 31, 2024, showing further increases to 8.18, 6.17, and 10.64, respectively. These higher ratios indicate a stronger ability of Hess Corporation to cover its interest expenses with its operating income.

Overall, the trend in interest coverage ratios for Hess Corporation reflects a positive progression, with the company's operating income becoming more capable of servicing its interest obligations over time. This indicates improved financial stability and a reduced risk of default on interest payments.