MasTec Inc (MTZ)
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 | -81,257 | 46,125 | 431,377 | 428,313 | 512,034 |
| Interest expense | US$ in thousands | 4,100 | 3,600 | 3,200 | 3,000 | 2,900 |
| Interest coverage | -19.82 | 12.81 | 134.81 | 142.77 | 176.56 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $-81,257K ÷ $4,100K
= -19.82
MasTec Inc's interest coverage ratio has fluctuated significantly over the past five years. In 2019 and 2020, the company had strong interest coverage ratios of 176.56 and 142.77, respectively, indicating the company's ability to comfortably cover its interest obligations with its earnings. However, the ratio decreased substantially in 2021 to 134.81, which is still considered healthy.
However, there was a significant decline in 2022, with the interest coverage ratio dropping to 12.81, which might raise concerns about the company's ability to cover its interest expenses. The situation worsened further in 2023, with a negative interest coverage ratio of -19.82, which indicates that the company's earnings were not sufficient to cover its interest payments.
This downward trend in the interest coverage ratio over the past two years may signal potential financial distress for MasTec Inc, as the company's ability to meet its interest obligations has deteriorated. Further analysis of the company's financial health and cash flow management is recommended to determine the underlying factors contributing to this decline in interest coverage.
Peer comparison
Dec 31, 2023