Installed Building Products Inc (IBP)
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 | 370,100 | 344,881 | 188,317 | 161,468 | 120,709 |
| Interest expense | US$ in thousands | 37,000 | 41,600 | 32,842 | 30,291 | 28,104 |
| Interest coverage | 10.00 | 8.29 | 5.73 | 5.33 | 4.30 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $370,100K ÷ $37,000K
= 10.00
Installed Building Products Inc's interest coverage ratio has been improving consistently over the past five years, indicating the company's ability to meet its interest obligations with its operating income. The interest coverage ratio has increased from 4.31 in 2019 to 9.98 in 2023, reflecting a positive trend in the company's financial health.
A higher interest coverage ratio signifies that the company is generating sufficient operating income to cover its interest expenses multiple times over. This indicates a lower risk of financial distress due to potential fluctuations in interest rates or operating performance.
The steady improvement in Installed Building Products Inc's interest coverage ratio suggests that the company has been managing its debt and interest expenses effectively. Investors and creditors may view this trend positively as it reflects the company's ability to service its debt obligations and indicates financial stability and strength.
Peer comparison
Dec 31, 2023