MGP Ingredients Inc (MGPI)
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 | 148,738 | 146,213 | 125,623 | 54,868 | 47,242 |
| Interest expense | US$ in thousands | 6,647 | 5,451 | 4,037 | 2,267 | 1,305 |
| Interest coverage | 22.38 | 26.82 | 31.12 | 24.20 | 36.20 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $148,738K ÷ $6,647K
= 22.38
The interest coverage ratio measures a company's ability to pay its interest expenses on outstanding debt. In the case of MGP Ingredients, Inc., the interest coverage ratio has remained consistently high over the past five years, with values ranging from 26.29 to 36.20. This indicates that the company has had strong earnings relative to its interest obligations during this period. A higher interest coverage ratio suggests that the company is at lower risk of defaulting on its debt payments. MGP Ingredients, Inc. has shown a consistent ability to generate sufficient earnings to cover its interest expenses, reflecting a stable and healthy financial position in terms of debt servicing capacity.