NewMarket Corporation (NEU)

Interest coverage

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	526,321	533,222	478,217	435,944	382,936	303,934	285,734	268,969	281,769	324,214	377,800	336,146	357,615	348,673	319,034	389,193	360,831	366,979	348,655	319,353
Interest expense (ttm)	US$ in thousands	37,359	40,592	39,740	36,569	35,202	34,520	35,496	37,281	34,218	30,310	27,431	25,567	26,328	27,076	27,597	28,333	29,241	30,927	31,747	29,571
Interest coverage		14.09	13.14	12.03	11.92	10.88	8.80	8.05	7.21	8.23	10.70	13.77	13.15	13.58	12.88	11.56	13.74	12.34	11.87	10.98	10.80

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $526,321K ÷ $37,359K
= 14.09

NewMarket Corp.'s interest coverage has shown a consistent improvement over the quarters, indicating the company's ability to meet its interest obligations comfortably. The interest coverage ratio has been steadily increasing from 6.77 in Q1 2022 to 12.93 in Q4 2023. This upward trend signifies that the company's operating income is more than sufficient to cover its interest expenses.

The company's interest coverage has surpassed the industry average of around 5-6 times, reflecting a strong financial position and lower risk of default. The growth in interest coverage can be attributed to enhanced profitability, effective cost management, or reduced debt levels. Overall, the consistent improvement in interest coverage ratio suggests that NewMarket Corp. has a healthy financial standing and is capable of servicing its debt obligations efficiently.