Murphy USA Inc (MUSA)

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 747,100 763,800 788,000 770,300 829,400 785,700 850,400 911,400 967,700 954,500 800,900 729,700 612,700 545,400 487,500 531,600 559,000 540,500 561,200 383,000
Interest expense (ttm) US$ in thousands 97,100 98,200 98,400 98,500 98,500 98,200 95,400 90,600 85,300 81,800 80,500 80,700 82,400 74,700 66,600 59,200 51,200 51,500 54,400 54,600
Interest coverage 7.69 7.78 8.01 7.82 8.42 8.00 8.91 10.06 11.34 11.67 9.95 9.04 7.44 7.30 7.32 8.98 10.92 10.50 10.32 7.01

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $747,100K ÷ $97,100K
= 7.69

The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. It is calculated by dividing earnings before interest and taxes (EBIT) by the interest expense. A higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations.

Analyzing Murphy USA Inc's interest coverage ratio over the past few years, we observe some fluctuations in the ratio. As of December 31, 2024, the interest coverage ratio stood at 7.69, indicating that the company generated operating income 7.69 times its interest expense during that period.

Looking at the trend from March 31, 2020, to December 31, 2024, we note that the interest coverage ratio generally increased from around 7.01 in March 2020 to 11.67 in September 2022. This upward trend suggests an improvement in the company's ability to meet interest payments over this period.

However, there were fluctuations in the ratio thereafter, with some declines noted in the following quarters. For instance, the ratio decreased to 7.32 in June 2021 and further to 7.30 in September 2021. Despite these fluctuations, the interest coverage ratio remained generally above 7.00, indicating that Murphy USA Inc has largely been able to comfortably cover its interest expenses with its operating income.

It is important for investors and stakeholders to continue monitoring the company's interest coverage ratio to assess its financial health and ability to manage debt obligations effectively.