Norfolk Southern Corporation (NSC)
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 | 4,136,000 | 3,042,000 | 4,822,000 | 4,524,000 | 3,155,000 |
| Interest expense | US$ in thousands | 807,000 | 722,000 | 692,000 | 646,000 | 625,000 |
| Interest coverage | 5.13 | 4.21 | 6.97 | 7.00 | 5.05 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $4,136,000K ÷ $807,000K
= 5.13
Norfolk Southern Corporation's interest coverage has shown variability over the past five years. In December 2020, the interest coverage ratio was 5.05, indicating that the company generated 5.05 times more earnings before interest and taxes (EBIT) than the amount needed to cover its interest expense. This ratio improved in December 2021 to 7.00, suggesting a stronger ability to meet interest obligations.
However, in December 2022 and 2024, Norfolk Southern Corporation's interest coverage slightly decreased to 6.97 and 5.13, respectively. This could indicate a potential decrease in EBIT relative to interest expenses during those years.
The most notable decline in interest coverage occurred in December 2023, where the ratio dropped to 4.21. This substantial decrease may raise concerns about the company's ability to comfortably cover its interest payments with its operating income.
Overall, Norfolk Southern Corporation's interest coverage ratio has displayed some fluctuations, underscoring the importance of closely monitoring the company's financial performance and ensuring it maintains a healthy balance between earnings and interest obligations.
Peer comparison
Dec 31, 2024