MasTec Inc (MTZ)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 438,223 | 357,959 | 259,383 | 224,803 | 151,701 | 154,497 | 156,263 | 114,794 | 155,315 | 198,583 | 264,513 | 343,535 | 483,489 | 545,643 | 563,475 | 539,192 | 484,793 | 458,123 | 479,847 | 564,056 |
| Interest expense (ttm) | US$ in thousands | 193,266 | 209,419 | 224,927 | 233,771 | 234,405 | 224,606 | 188,935 | 148,907 | 112,255 | 76,348 | 62,554 | 56,996 | 53,414 | 53,643 | 54,105 | 55,084 | 59,629 | 64,213 | 69,957 | 71,772 |
| Interest coverage | 2.27 | 1.71 | 1.15 | 0.96 | 0.65 | 0.69 | 0.83 | 0.77 | 1.38 | 2.60 | 4.23 | 6.03 | 9.05 | 10.17 | 10.41 | 9.79 | 8.13 | 7.13 | 6.86 | 7.86 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $438,223K ÷ $193,266K
= 2.27
MasTec Inc's interest coverage ratio has shown a declining trend over the period from March 31, 2020, to December 31, 2024. The interest coverage ratio stood at 7.86 on March 31, 2020, showing the company was able to cover its interest expenses approximately 7.86 times with its operating income. However, this ratio gradually decreased to 2.27 by December 31, 2024, indicating a decline in the company's ability to cover its interest expenses with operating income.
A decline in the interest coverage ratio may raise concerns about MasTec Inc's financial health and ability to meet its debt obligations. A ratio below 1 suggests that the company may have difficulty meeting its interest payments using its operating income alone. Investors, creditors, and analysts often monitor the interest coverage ratio to assess a company's risk of default on its debt.
It is essential for MasTec Inc to closely monitor and address the declining trend in the interest coverage ratio to ensure the company remains financially stable and can meet its debt obligations comfortably in the future. Further analysis and actions may be required to improve the company's interest coverage ratio and strengthen its financial position.
Peer comparison
Dec 31, 2024