Martin Marietta Materials Inc (MLM)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 2,765,000 | 1,652,200 | 1,086,600 | 998,200 | 1,007,400 |
| Interest expense | US$ in thousands | 169,000 | 165,300 | 169,000 | 142,700 | 118,100 |
| Interest coverage | 16.36 | 10.00 | 6.43 | 7.00 | 8.53 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $2,765,000K ÷ $169,000K
= 16.36
The interest coverage ratio measures Martin Marietta Materials Inc's ability to meet its interest payments on outstanding debt. A higher ratio indicates a stronger ability to cover interest expenses.
Based on the provided data:
- As of December 31, 2020, the interest coverage ratio was 8.53, indicating that the company generated 8.53 times the amount needed to cover its interest payments that year.
- By December 31, 2021, the interest coverage decreased to 7.00, suggesting a slight decline in the company's ability to cover interest expenses.
- The ratio further decreased to 6.43 as of December 31, 2022, indicating potential financial strain in meeting interest obligations.
- However, the trend reversed by December 31, 2023, with the interest coverage ratio increasing to 10.00, which signifies an improvement in the company's ability to cover interest costs.
- The most recent data point, as of December 31, 2024, shows a significant improvement with an interest coverage ratio of 16.36, indicating a strong capacity to service its interest payments.
Overall, fluctuations in the interest coverage ratio suggest varying levels of financial health and the ability to handle debt obligations over the specified period. The company's significant increase in interest coverage ratio in 2024 reflects a positive trend in its ability to manage interest expenses efficiently.
Peer comparison
Dec 31, 2024