Ingevity Corp (NGVT)
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 | 83,200 | 331,400 | 214,500 | 282,200 | 282,500 |
| Interest expense | US$ in thousands | 93,300 | 61,800 | 51,700 | 47,100 | 54,600 |
| Interest coverage | 0.89 | 5.36 | 4.15 | 5.99 | 5.17 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $83,200K ÷ $93,300K
= 0.89
The interest coverage ratio of Ingevity Corp has exhibited some fluctuation in recent years. The ratio was 2.95 in 2023, indicating that the company's operating income was able to cover its interest expenses approximately 2.95 times over. This represents a decrease from the previous year, where the ratio was 6.28.
In 2022, Ingevity's interest coverage ratio improved significantly to 6.28, indicating a strong ability to meet its interest obligations with operating income. This trend continued from 2021, where the ratio was 6.44, and 2020, where it stood at 6.95, suggesting a consistent ability to cover interest expenses comfortably over these years.
Comparing these results to 2019, where the interest coverage ratio was 6.42, the company's ability to service its interest payments remained relatively stable in recent years. However, the decline in the ratio in 2023 may indicate a decrease in earnings relative to interest expenses during that period. It would be important to further assess the reasons behind this decline and monitor the trend in future periods.
Peer comparison
Dec 31, 2023