Martin Marietta Materials Inc (MLM)

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	1,626,700	1,270,600	998,400	1,007,300	877,500
Interest expense	US$ in thousands	165,300	169,000	142,700	118,100	129,300
Interest coverage		9.84	7.52	7.00	8.53	6.79

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $1,626,700K ÷ $165,300K
= 9.84

The interest coverage ratio of Martin Marietta Materials, Inc. has shown a generally positive trend over the past five years, indicating the company's ability to meet its interest obligations comfortably. The ratio has improved from 6.85 in 2019 to 9.73 in 2023, which suggests that the company's earnings before interest and taxes (EBIT) are sufficient to cover its interest expenses nearly 10 times. This demonstrates strong financial health and a reduced risk of default on interest payments. The consistent increase in the interest coverage ratio reflects the company's improved profitability and efficiency in managing its debt commitments over the years. The higher interest coverage ratio also signifies a decreased financial risk, making Martin Marietta Materials, Inc. less vulnerable to potential challenges related to servicing its debt.