NewMarket Corporation (NEU)

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 641,473 607,311 567,686 543,747 526,321 533,222 478,217 435,944 382,936 303,934 285,734 268,969 281,769 324,214 377,800 336,146 357,615 348,673 319,034 389,193
Interest expense (ttm) US$ in thousands 57,366 52,831 47,895 42,240 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
Interest coverage 11.18 11.50 11.85 12.87 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

December 31, 2024 calculation

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

Based on the provided data, NewMarket Corporation's interest coverage ratio has shown fluctuations over the observed period. The interest coverage ratio measures the company's ability to meet its interest payments on outstanding debt, with higher ratios indicating a more favorable position.

NewMarket Corporation's interest coverage ratio ranged from a high of 14.09 in December 2023 to a low of 7.21 in March 2022. Generally, a ratio above 1 indicates that the company is generating enough operating income to cover its interest expenses. In this case, the company maintained an interest coverage ratio above 1 throughout the period, indicating a capacity to meet its interest obligations.

However, the decreasing trend from 13.74 in March 2020 to 11.18 in December 2024 suggests a potential concern. A declining interest coverage ratio over time may indicate increasing financial risk or potential difficulties in meeting debt obligations. Investors, creditors, and analysts may monitor this trend closely to assess the company's financial health and ability to service its debt in the future.