Hub Group Inc (HUBG)

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	140,291	222,639	474,590	238,212	105,443
Interest expense	US$ in thousands	14,464	13,435	7,506	7,302	9,343
Interest coverage		9.70	16.57	63.23	32.62	11.29

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $140,291K ÷ $14,464K
= 9.70

To analyze Hub Group Inc's interest coverage based on the provided data, we can see a fluctuating trend over the past five years. The interest coverage ratio measures the company's ability to meet its interest obligations using its operating income.

In December 2020, the interest coverage ratio stood at 11.29, indicating that the company's operating income was able to cover its interest expense approximately 11 times. This suggests a reasonable level of financial health and indicates a good ability to meet interest payments.

By December 2021, the interest coverage ratio increased significantly to 32.62, demonstrating a substantial improvement in the company's ability to cover its interest expenses. This sharp increase suggests a stronger financial position and increased profitability.

The trend continued to improve in December 2022, with the interest coverage ratio reaching 63.23. This significant rise indicates a robust ability to service interest obligations, reflecting strong financial performance and profitability.

However, in December 2023, there was a decline in the interest coverage ratio to 16.57. Although this figure is still above 1, indicating the company can cover its interest payments with its operating income, it represents a decrease compared to the previous year.

By December 2024, the interest coverage ratio fell further to 9.70. This decrease suggests a potential challenge in meeting interest payments from operating income alone. It might indicate increased financial risk or a need to closely monitor the company's financial health.

In summary, the data shows fluctuations in Hub Group Inc's interest coverage ratio over the past five years, with periods of strong improvement followed by declines. It is important for stakeholders to closely monitor these ratios to gauge the company's ability to meet its interest obligations and assess its overall financial health.