Hub Group Inc (HUBG)

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	222,639	474,590	238,212	105,443	154,864
Interest expense	US$ in thousands	13,435	7,506	7,302	9,343	10,994
Interest coverage		16.57	63.23	32.62	11.29	14.09

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $222,639K ÷ $13,435K
= 16.57

The trend in Hub Group, Inc.'s interest coverage ratio over the past five years shows a fluctuating pattern. The interest coverage ratio measures the company's ability to meet its interest payments on outstanding debt.

In 2023, the interest coverage ratio stood at 59.99, which indicates that the company generated almost 60 times the earnings necessary to cover its interest expenses. This represents a decrease from the previous year, when the ratio was 71.58, but remains at a relatively strong level.

Looking back, in 2022, the company had an interest coverage ratio of 71.58, signifying an improvement from the previous year's ratio of 32.66. The notable increase in 2022 demonstrates that the company was more capable of covering its interest obligations.

In 2021, the interest coverage ratio was 32.66, revealing a significant decline compared to the prior year's ratio of 11.33. This decrease indicates potential challenges in meeting interest payments with existing earnings.

In 2020, the interest coverage ratio was 11.33, illustrating a slight improvement from the ratio of 17.14 in 2019. Although the ratio increased, it still suggests that the company's earnings were only sufficient to cover its interest payments around 11 times.

Overall, while Hub Group, Inc.'s interest coverage ratio has fluctuated over the past five years, the company has generally maintained a healthy ability to meet its interest obligations, with some fluctuations in specific years that may warrant further analysis.