Middlesex Water Company (MSEX)

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	45,708	55,036	39,169	41,799	38,012
Interest expense	US$ in thousands	13,143	9,367	8,114	7,493	7,264
Interest coverage		3.48	5.88	4.83	5.58	5.23

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $45,708K ÷ $13,143K
= 3.48

Middlesex Water Co.'s interest coverage ratio has been fluctuating over the past five years, indicating varying levels of ability to cover its interest expenses with its operating income.

The interest coverage ratio stood at 2.98 in 2023, down from 4.49 in 2022, which may raise concerns about the company's ability to comfortably meet its interest payments from its earnings. However, it is important to note that an interest coverage ratio above 1 indicates that the company is generating enough income to cover its interest expenses.

The decreasing trend in the interest coverage ratio from 2022 to 2023 suggests a potential increase in the company's interest expenses relative to its operating income.

Overall, while the current interest coverage ratio of 2.98 is above the minimum threshold of 1, investors and creditors may want to closely monitor Middlesex Water Co.'s ability to generate sufficient earnings to cover its interest obligations in the future.