Magnolia Oil & Gas Corp (MGY)
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 | 511,988 | 526,009 | 545,130 | 532,112 | 534,487 | 594,306 | 757,923 | 964,849 | 1,073,786 | 1,077,893 | 937,636 | 738,568 | 602,594 | 443,245 | 293,693 | 138,567 | -1,925,669 | -1,945,649 | -1,939,921 | -1,870,354 |
| Interest expense (ttm) | US$ in thousands | 4,459 | 4,388 | 4,345 | 4,303 | 4,256 | 4,215 | 4,175 | 4,084 | 5,854 | 5,953 | 6,051 | 6,192 | 4,290 | 4,067 | 3,849 | 3,642 | 3,628 | 3,607 | 3,586 | -2,979 |
| Interest coverage | 114.82 | 119.87 | 125.46 | 123.66 | 125.58 | 141.00 | 181.54 | 236.25 | 183.43 | 181.07 | 154.96 | 119.28 | 140.46 | 108.99 | 76.30 | 38.05 | -530.78 | -539.41 | -540.97 | — |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $511,988K ÷ $4,459K
= 114.82
The interest coverage ratio for Magnolia Oil & Gas Corp shows a fluctuating trend over the analyzed period, indicating the company's ability to meet its interest obligations with its earnings before interest and taxes (EBIT).
From March 31, 2020, to June 30, 2022, the interest coverage ratio was negative, signaling that the company's EBIT was insufficient to cover its interest expenses during these periods. This situation can raise concerns about the company's financial stability and its ability to service its debt effectively.
However, from March 31, 2021, onwards, there was a significant improvement in the interest coverage ratio, reaching positive values. The ratio continued to increase steadily, demonstrating a healthier financial position and signaling that Magnolia Oil & Gas Corp's EBIT was more than adequate to cover its interest payments.
The peak interest coverage ratio was observed on December 31, 2022, at 183.43, indicating a strong ability to cover interest expenses with operating income. Subsequently, the ratio showed a slight decline but remained above 100, further affirming the company's improving financial health.
Overall, the increasing trend in the interest coverage ratio from negative values to robust positive levels reflects Magnolia Oil & Gas Corp's enhanced financial performance and its ability to meet its interest obligations more comfortably in recent periods. However, continuous monitoring of this ratio is essential to ensure the company's long-term financial sustainability.
Peer comparison
Dec 31, 2024