Nextera Energy Inc (NEE)
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 | 10,237,000 | 4,081,000 | 2,913,000 | 5,116,000 | 5,353,000 |
| Interest expense | US$ in thousands | 3,324,000 | 585,000 | 1,270,000 | 1,950,000 | 2,249,000 |
| Interest coverage | 3.08 | 6.98 | 2.29 | 2.62 | 2.38 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $10,237,000K ÷ $3,324,000K
= 3.08
NextEra Energy Inc's interest coverage ratio has fluctuated over the past five years. In 2023, the interest coverage ratio was 2.76, which indicates that the company generated operating income 2.76 times higher than its interest expenses for the year. This is a decrease from 6.43 in 2022, suggesting that the company's ability to cover its interest obligations declined significantly.
Comparing the 2023 ratio to the one in 2021 and 2019, where the interest coverage ratio was also 2.76 and 2.33 respectively, it can be observed that the company's current interest coverage is similar to the levels seen in those years. However, it is lower than the ratio of 1.78 in 2020.
Overall, while NextEra Energy Inc's interest coverage ratio in 2023 is at a moderate level, the significant decrease from the previous year may be a point of concern for stakeholders as it suggests a reduced capacity to meet interest payments from operating income. Further analysis of the underlying reasons for this decline would be necessary to understand its implications for the company's financial health.
Peer comparison
Dec 31, 2023