KBR Inc (KBR)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 662,000 | -55,000 | 369,000 | 218,000 | 37,000 |
| Interest expense | US$ in thousands | 144,000 | 115,000 | 87,000 | 80,000 | 72,000 |
| Interest coverage | 4.60 | -0.48 | 4.24 | 2.72 | 0.51 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $662,000K ÷ $144,000K
= 4.60
The interest coverage ratio for KBR Inc has shown some fluctuations over the years. As of December 31, 2020, the interest coverage ratio was very low at 0.51, indicating that the company may have had difficulty covering its interest obligations with its operating income alone. However, there was a significant improvement by December 31, 2021, with a ratio of 2.72, suggesting that the company's ability to cover its interest payments had strengthened.
Subsequently, by December 31, 2022, the interest coverage ratio further improved to 4.24, indicating that the company's earnings were more than sufficient to cover its interest expenses. However, there was a notable downturn by December 31, 2023, with a negative interest coverage ratio of -0.48. A negative ratio suggests that the company's operating income was insufficient to cover its interest payments, which can be a cause for concern.
Nevertheless, the company rebounded strongly by December 31, 2024, with an interest coverage ratio of 4.60, signaling a robust ability to meet its interest obligations with its operating income. Overall, while KBR Inc experienced some fluctuations in its interest coverage over the years, the trend indicates a general improvement in the company's ability to handle its interest expenses.
Peer comparison
Dec 31, 2024