Kaiser Aluminum Corporation (KALU)
Interest coverage
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 103,200 | 59,800 | 58,600 | 19,500 | 10,400 | 49,500 | 52,400 | 32,600 | 25,500 | 27,500 | 20,700 | 51,400 | 79,700 | 51,100 | 79,200 | 106,300 | 105,000 | 151,400 | 147,100 | 149,000 |
| Interest expense (ttm) | US$ in thousands | 46,900 | 47,200 | 47,900 | 48,000 | 48,300 | 48,800 | 49,200 | 49,400 | 49,500 | 49,400 | 49,000 | 47,100 | 40,900 | 36,000 | 29,700 | 25,000 | 24,600 | 23,000 | 22,900 | 22,800 |
| Interest coverage | 2.20 | 1.27 | 1.22 | 0.41 | 0.22 | 1.01 | 1.07 | 0.66 | 0.52 | 0.56 | 0.42 | 1.09 | 1.95 | 1.42 | 2.67 | 4.25 | 4.27 | 6.58 | 6.42 | 6.54 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $103,200K ÷ $46,900K
= 2.20
Interest coverage is a financial ratio that measures a company's ability to pay its interest expenses on outstanding debt with its operating income. The trend in Kaiser Aluminum Corp's interest coverage ratio over the past eight quarters indicates a fluctuating pattern. In Q4 2023, the interest coverage ratio was 2.23, indicating that the company generated operating income 2.23 times the amount needed to cover its interest expenses. This represents an improvement from the previous quarter where the ratio was 1.67.
Looking back, the interest coverage ratio has been on a rising trend since Q1 2023 when it was at its lowest level of 0.48. The steady increase in the ratio suggests that Kaiser Aluminum Corp's operating income has been increasingly capable of covering its interest expenses, which is a positive sign for creditors and investors. However, it is important to monitor this ratio over time to ensure the company's ability to meet its interest obligations in the long term.
Peer comparison
Dec 31, 2023