NorthWestern Corporation (NWE)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | ||
|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 323,321 | 334,788 | 322,485 |
| Interest expense (ttm) | US$ in thousands | 131,673 | 125,724 | 121,052 |
| Interest coverage | 2.46 | 2.66 | 2.66 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $323,321K ÷ $131,673K
= 2.46
The interest coverage ratio of NorthWestern Corporation for the periods ending June 30, 2024, and September 30, 2024, was consistent at 2.66. However, the ratio declined slightly to 2.46 for the period ending December 31, 2024.
This indicates that NorthWestern Corporation's ability to cover its interest expenses decreased in the last quarter of 2024 compared to the previous two quarters. A lower interest coverage ratio may suggest a higher financial risk, as the company may have less cushion to meet its interest obligations from its operating income.
It is advisable for stakeholders to monitor this trend closely to ensure that NorthWestern Corporation's profitability and cash flow remain sufficient to cover its interest payments in the future. Additionally, management may need to assess the company's debt levels and interest expense management strategies to maintain a healthy interest coverage ratio.
Peer comparison
Dec 31, 2024