KBR Inc (KBR)
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 | -55,000 | 369,000 | 218,000 | 37,000 | 360,000 |
| Interest expense | US$ in thousands | 115,000 | 87,000 | 80,000 | 72,000 | 99,000 |
| Interest coverage | -0.48 | 4.24 | 2.72 | 0.51 | 3.64 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $-55,000K ÷ $115,000K
= -0.48
The interest coverage ratio measures a company's ability to cover its interest expenses with its operating earnings. A higher ratio indicates a stronger ability to meet interest obligations. Looking at KBR Inc's interest coverage over the past five years, there has been significant fluctuation.
In 2023, the interest coverage ratio was -0.48, indicating that the company's operating earnings were insufficient to cover its interest expenses. This negative ratio raises concerns about KBR Inc's financial health and ability to meet its debt obligations.
In contrast, the interest coverage improved to 4.24 in 2022, showing a significant increase from the previous year and indicating a healthier financial position. Similarly, in 2021, the interest coverage was 2.72, suggesting a moderate ability to cover interest costs.
However, the interest coverage was only 0.51 in 2020, indicating a relatively weak ability to cover interest expenses. The ratio improved to 3.64 in 2019, showing a better financial performance compared to the previous year.
Overall, KBR Inc's interest coverage has varied significantly over the past five years, with both positive and concerning ratios. Investors and creditors should closely monitor the company's ability to generate sufficient operating earnings to cover its interest expenses going forward.
Peer comparison
Dec 31, 2023