National HealthCare Corporation (NHC)
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 | 140,384 | 90,572 | 30,262 | 150,386 | 53,703 |
| Interest expense | US$ in thousands | 4,135 | 324 | 563 | 845 | 1,399 |
| Interest coverage | 33.95 | 279.54 | 53.75 | 177.97 | 38.39 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $140,384K ÷ $4,135K
= 33.95
The interest coverage ratio for National HealthCare Corporation has shown significant fluctuations over the years based on the provided data:
1. December 31, 2020: 38.39
2. December 31, 2021: 177.97
3. December 31, 2022: 53.75
4. December 31, 2023: 279.54
5. December 31, 2024: 33.95
The interest coverage ratio measures the company's ability to meet its interest obligations on outstanding debt. A higher ratio indicates that the company is more capable of servicing its debt from its operating income.
In this case, National HealthCare Corporation experienced a substantial improvement in its interest coverage ratio from 2020 to 2021, indicating a significant increase in its ability to cover interest expenses. However, the ratio decreased in 2022 and 2024, suggesting potential challenges in meeting interest payments during those years.
It is crucial for National HealthCare Corporation to closely monitor and manage its interest coverage ratio to ensure the sustainability of its debt servicing capabilities and overall financial health.
Peer comparison
Dec 31, 2024