NewMarket Corporation (NEU)

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	641,473	483,045	382,936	281,769	328,615
Interest expense	US$ in thousands	57,366	37,359	35,202	34,218	26,328
Interest coverage		11.18	12.93	10.88	8.23	12.48

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $641,473K ÷ $57,366K
= 11.18

The interest coverage ratio for NewMarket Corporation has shown some fluctuation over the years based on the provided data.

As of December 31, 2020, the interest coverage ratio stood at 12.48, indicating that the company's operating income was sufficient to cover its interest expense by approximately 12.48 times. This level suggests a strong ability to meet interest obligations.

However, by December 31, 2021, the interest coverage ratio decreased to 8.23, which may raise some concerns as the company's operating income was only able to cover its interest expense by 8.23 times. This decline could indicate a potential strain on the company's ability to meet its interest payments from operating earnings.

In the following years, there was some improvement in the interest coverage ratio. By December 31, 2022, the ratio increased to 10.88, signaling a better ability to cover interest expenses from operating income. The trend continued to improve as of December 31, 2023, with an interest coverage ratio of 12.93, indicating a strong capacity to meet interest obligations.

However, by December 31, 2024, the interest coverage ratio slightly decreased to 11.18, which, although still favorable, showed a slight reduction in the company's ability to cover its interest expenses from operating income compared to the previous year.

Overall, the interest coverage ratios demonstrate that NewMarket Corporation has generally maintained a solid ability to meet its interest obligations over the years, with some fluctuations in performance. It is important for stakeholders to monitor these ratios to ensure the company's continued financial health and ability to meet its debt obligations.