Iridium Communications Inc (IRDM)
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 | 3,864 | 76,679 | 46,314 | 35,483 | 10,120 |
| Interest expense | US$ in thousands | 14,700 | 72,090 | 72,816 | 98,600 | 140,100 |
| Interest coverage | 0.26 | 1.06 | 0.64 | 0.36 | 0.07 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $3,864K ÷ $14,700K
= 0.26
The interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt. A higher ratio indicates a stronger ability to cover interest expenses with operating income.
Looking at the trend in Iridium Communications Inc's interest coverage ratio over the past five years, there has been a fluctuating pattern. In 2019, the interest coverage ratio was very low at 0.09, indicating the company had minimal operating income available to cover its interest expenses. Over the next few years, there was a gradual improvement in the ratio, reaching its highest point in 2022 at 1.16. This improvement suggested that the company's operating income was better able to cover its interest costs during that period.
However, in 2023, the interest coverage ratio declined to 0.84, indicating a reduction in the company's ability to cover interest expenses with its operating income compared to the previous year.
Overall, the trend in Iridium Communications Inc's interest coverage ratio shows some variability, with periods of improvement followed by a slight decline. It would be essential for the company to closely monitor its interest coverage ratio and ensure it maintains a healthy level to meet its debt obligations effectively.
Peer comparison
Dec 31, 2023