NRG Energy Inc. (NRG)
Interest coverage
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 454,000 | -1,682,000 | -2,075,000 | -1,853,000 | 2,080,000 | 2,884,000 | 4,981,000 | 5,794,000 | 3,344,000 | 3,799,000 | 1,954,000 | 881,000 | 1,163,000 | 1,327,000 | 1,364,000 | 1,159,000 | 1,517,000 | 1,480,000 | 1,061,000 | 956,000 |
| Interest expense (ttm) | US$ in thousands | 667,000 | 576,000 | 508,000 | 462,000 | 417,000 | 424,000 | 441,000 | 461,000 | 485,000 | 483,000 | 460,000 | 431,000 | 402,000 | 388,000 | 388,000 | 397,000 | 413,000 | 440,000 | 463,000 | 481,000 |
| Interest coverage | 0.68 | -2.92 | -4.08 | -4.01 | 4.99 | 6.80 | 11.29 | 12.57 | 6.89 | 7.87 | 4.25 | 2.04 | 2.89 | 3.42 | 3.52 | 2.92 | 3.67 | 3.36 | 2.29 | 1.99 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $454,000K ÷ $667,000K
= 0.68
Interest coverage is a key financial ratio that reflects a company's ability to meet its interest obligations from its operating income. A higher interest coverage ratio indicates a company is more capable of servicing its debt.
Based on the data provided for NRG Energy Inc., the interest coverage ratio has experienced significant fluctuations over the past eight quarters. In Q4 2023, the interest coverage ratio was -1.55, indicating that the company's operating income was insufficient to cover its interest expenses. This declining trend continued in the preceding quarters, with ratios of -3.14 in Q3 2023, -4.32 in Q2 2023, and -4.02 in Q1 2023.
Conversely, the company demonstrated strong interest coverage in Q4 2022 and Q3 2022, with ratios of 5.35 and 7.18, respectively. This suggests that NRG Energy Inc. had ample operating income to cover its interest payments during those periods. The interest coverage ratio saw further improvement in Q2 2022 and Q1 2022, reaching 11.79 and 13.46, indicating even stronger financial health.
Overall, the trend in NRG Energy Inc.'s interest coverage ratio shows that the company has experienced fluctuations in its ability to meet interest obligations from operating income. It is important for stakeholders to monitor this ratio closely to assess the company's financial stability and debt repayment capability.
Peer comparison
Dec 31, 2023