Middlesex Water Company (MSEX)
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 | 53,210 | 45,708 | 55,036 | 39,169 | 41,799 |
| Interest expense | US$ in thousands | 12,769 | 13,143 | 9,367 | 8,114 | 7,493 |
| Interest coverage | 4.17 | 3.48 | 5.88 | 4.83 | 5.58 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $53,210K ÷ $12,769K
= 4.17
Middlesex Water Company's interest coverage ratio has exhibited some fluctuations over the past five years. As of December 31, 2020, the interest coverage ratio stood at 5.58, indicating that the company generated operating income 5.58 times higher than its interest expenses for that year.
However, by December 31, 2021, the interest coverage ratio slightly decreased to 4.83, suggesting a somewhat weaker ability to cover interest obligations with operating earnings. The ratio then improved to 5.88 by December 31, 2022, indicating a better coverage of interest expenses compared to the previous year.
Yet, there was a notable decline in the interest coverage ratio to 3.48 by December 31, 2023, signaling a potential concern as the company's ability to cover interest expenses decreased significantly.
By December 31, 2024, the interest coverage ratio recovered slightly to 4.17, showing an improvement from the previous year but still below the levels observed in 2020 and 2022.
Overall, Middlesex Water Company should closely monitor its interest coverage ratio to ensure it maintains a healthy ability to meet its interest obligations and address any fluctuations that may impact its financial stability.
Peer comparison
Dec 31, 2024