IDACORP Inc (IDA)

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	404,948	386,201	369,160	353,543	343,836
Interest expense	US$ in thousands	116,457	89,375	86,698	87,426	86,475
Interest coverage		3.48	4.32	4.26	4.04	3.98

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $404,948K ÷ $116,457K
= 3.48

The interest coverage ratio represents the ability of Idacorp, Inc. to meet its interest obligations with its operating income. A higher interest coverage ratio indicates a company is more capable of servicing its debt.

From the data provided, we observe fluctuations in Idacorp's interest coverage over the past five years. In 2023, the interest coverage ratio was 2.44, slightly higher compared to the prior year. This suggests that the company generated 2.44 times more operating income than the interest expenses for that year, indicating a moderate ability to cover interest payments.

Looking back, we see a downward trend in the interest coverage ratio from 3.20 in 2019 to the current 2.44 in 2023. While the ratios for the past five years are above 1, indicating that Idacorp has been able to meet its interest obligations, the declining trend raises some concerns regarding the company's ability to cover interest expenses with its operating income.

It is essential for investors and stakeholders to closely monitor Idacorp's interest coverage ratio, as a sustained decrease in this ratio could indicate potential financial distress and a higher risk of defaulting on its debt obligations. Further analysis of the company's financial health and operational efficiency would be necessary to understand the underlying reasons for the changing interest coverage ratios.