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.
Peer comparison
Dec 31, 2024