Knight Transportation Inc (KNX)

Interest coverage

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Earnings before interest and tax (EBIT) (ttm) US$ in thousands 214,026 178,939 188,376 233,618 366,862 577,927 755,046 946,706 1,071,309 1,194,657 1,193,911 1,101,259 968,839 836,614 732,131 624,726 573,020 486,967 411,399 429,354
Interest expense (ttm) US$ in thousands 171,158 166,417 161,373 145,245 127,100 106,898 82,223 67,214 50,803 37,872 30,372 24,334 21,140 17,921 13,974 14,688 17,309 20,499 25,057 28,192
Interest coverage 1.25 1.08 1.17 1.61 2.89 5.41 9.18 14.08 21.09 31.54 39.31 45.26 45.83 46.68 52.39 42.53 33.11 23.76 16.42 15.23

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $214,026K ÷ $171,158K
= 1.25

Knight Transportation Inc's interest coverage ratio has exhibited a fluctuating trend over the past few years. Starting at a healthy level of 15.23 in March 2020, the ratio increased steadily, reaching a peak of 52.39 in June 2021. This indicates the company's strong ability to cover its interest expenses with operating income.

After peaking in mid-2021, the interest coverage ratio began to decline gradually, although it remained above 30 until September 2022. However, a more significant drop was observed from December 2022 to March 2024, falling below 10 over this period. This downward trend suggests a potential strain on Knight Transportation's ability to cover its interest obligations with its earnings.

By the end of 2024, the interest coverage ratio had declined to 1.25, indicating a significant decrease in the company's ability to service its debt with its operating income. This could be a cause for concern, as a low interest coverage ratio may signal financial distress and heightened risk for creditors. Knight Transportation Inc may need to closely monitor its financial position and take proactive measures to improve its interest coverage ratio in order to maintain financial stability and meet its debt obligations effectively.