Northwest Natural Gas Co (NWN)
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 | 184,941 | 167,477 | 163,117 | 148,351 | 143,474 |
| Interest expense | US$ in thousands | 76,566 | 53,247 | 44,486 | 43,052 | 42,685 |
| Interest coverage | 2.42 | 3.15 | 3.67 | 3.45 | 3.36 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $184,941K ÷ $76,566K
= 2.42
The interest coverage ratio of Northwest Natural Holding Co has shown a declining trend over the past five years. The ratio decreased from 3.36 in 2019 to 2.42 in 2023, indicating a potential deterioration in the company's ability to cover its interest expenses with operating income. While the ratio was above 3 in the previous years (2020 to 2022), the decline in 2023 raises concerns about the company's financial health and its ability to service its debt obligations comfortably. A lower interest coverage ratio may suggest higher financial risk and a decreased capacity to handle debt burdens, which could be a cause for further analysis and monitoring by investors and stakeholders.
Peer comparison
Dec 31, 2023