Koppers Holdings Inc (KOP)
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 | 195,000 | 139,800 | 160,200 | 191,900 | 128,300 |
| Interest expense | US$ in thousands | 71,000 | 44,800 | 40,500 | 48,900 | 61,700 |
| Interest coverage | 2.75 | 3.12 | 3.96 | 3.92 | 2.08 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $195,000K ÷ $71,000K
= 2.75
The interest coverage ratio for Koppers Holdings Inc has fluctuated over the past five years, indicating the company's ability to cover its interest payments from its operating income.
From 2019 to 2020, there was a decrease in the interest coverage ratio from 2.19 to 3.34, indicating a significant improvement in the company's ability to cover its interest expenses. However, this positive trend was not sustained, as the ratio declined in subsequent years.
In 2021 and 2022, the interest coverage ratio remained relatively stable at 3.15 and 3.02, respectively. This suggests that the company continued to generate enough operating income to comfortably cover its interest payments during these years.
In the most recent year, 2023, Koppers Holdings Inc experienced a further decline in the interest coverage ratio to 2.72. This decrease may raise concerns about the company's ability to service its debt obligations with its current level of profitability.
Overall, while Koppers Holdings Inc has demonstrated varying levels of interest coverage over the years, the recent decline in the ratio signals a potential need for closer monitoring of the company's financial performance and debt management strategies.
Peer comparison
Dec 31, 2023