Enviri Corporation (NVRI)
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 | 10,547 | 98,660 | -50,185 | 97,267 | 372 |
| Interest expense | US$ in thousands | 112,217 | 117,210 | 75,156 | 63,235 | 61,609 |
| Interest coverage | 0.09 | 0.84 | -0.67 | 1.54 | 0.01 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $10,547K ÷ $112,217K
= 0.09
Enviri Corporation's interest coverage ratio has fluctuated significantly over the years based on the provided data.
As of December 31, 2020, the interest coverage ratio was exceptionally low at 0.01, indicating that the company's operating income was only able to cover 1% of its interest expenses. This raises concerns about the company's ability to meet its interest obligations comfortably.
By December 31, 2021, there was a notable improvement in the interest coverage ratio to 1.54, suggesting that the company's operating income could cover its interest expenses 1.54 times. This improvement is a positive sign, indicating a better ability to meet interest payments.
However, by December 31, 2022, the interest coverage ratio turned negative at -0.67, which raises a red flag. A negative interest coverage ratio implies that the company's operating income was insufficient to cover its interest expenses, potentially indicating financial distress.
Enviri Corporation managed to improve its interest coverage ratio to 0.84 by December 31, 2023, which was better than in 2022 but still below the ideal benchmark of 1. This suggests that the company may still be struggling to comfortably cover its interest obligations.
As of December 31, 2024, the interest coverage ratio dropped again to a low 0.09, indicating a concerning situation where the company's operating income may only cover 9% of its interest expenses. This low ratio suggests potential challenges in meeting interest payments.
In conclusion, Enviri Corporation's interest coverage has shown fluctuations over the years, with periods of improvement and decline. Monitoring this ratio is crucial for evaluating the company's financial health and its ability to meet interest obligations.