NOV Inc. (NOV)
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 | 708,000 | 316,000 | -158,000 | -2,700,000 | -6,364,000 |
| Interest expense | US$ in thousands | 88,000 | 78,000 | 77,000 | 84,000 | 100,000 |
| Interest coverage | 8.05 | 4.05 | -2.05 | -32.14 | -63.64 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $708,000K ÷ $88,000K
= 8.05
The interest coverage ratio for NOV Inc has fluctuated over the past five years. In 2023, the interest coverage ratio improved significantly to 12.83, indicating that the company's operating income was sufficient to cover its interest expenses approximately 12.83 times. This suggests an enhanced ability to meet interest payments comfortably.
However, the previous years showed varying levels of performance. In 2022, the ratio was 5.63, reflecting a moderate ability to cover interest expenses. The company experienced financial difficulties in 2021 and 2020, with negative interest coverage ratios of -2.04 and -10.31, respectively. This implies that the company's operating income was insufficient to cover its interest expenses during these periods, indicating financial distress.
In 2019, the interest coverage ratio was also negative at -5.89, further emphasizing the challenging financial situation at that time. Overall, the trend in the interest coverage ratio suggests fluctuating financial health for NOV Inc over the five-year period, with significant improvement in 2023 compared to the previous years.
Peer comparison
Dec 31, 2023