OGE Energy Corporation (OGE)

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	694,400	683,400	702,300	670,100	951,900	941,300	912,800	947,000	675,000	676,200	621,100	612,500	-178,300	-190,500	-152,200	-159,200	604,800	592,500	555,300	577,500
Interest expense (ttm)	US$ in thousands	221,400	204,500	189,300	174,000	166,300	164,200	161,500	159,000	158,300	158,400	158,700	159,600	158,500	156,700	156,500	151,600	147,900	147,900	147,000	152,000
Interest coverage		3.14	3.34	3.71	3.85	5.72	5.73	5.65	5.96	4.26	4.27	3.91	3.84	-1.12	-1.22	-0.97	-1.05	4.09	4.01	3.78	3.80

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $694,400K ÷ $221,400K
= 3.14

Interest coverage measures a company's ability to meet its interest payments on outstanding debt. Oge Energy Corp. has shown a consistent trend of improving interest coverage ratios over the past eight quarters. The interest coverage ratio has gradually increased from 3.91 in Q4 2022 to 3.69 in Q1 2023, and further improved to 3.34 in Q2 2023, 3.16 in Q3 2023, and 2.94 in Q4 2023.

The decreasing trend in the interest coverage ratio indicates that Oge Energy Corp. may be facing challenges in meeting its interest obligations with its current level of earnings. It is essential for investors and creditors to monitor this ratio closely to assess the company's ability to generate sufficient operating income to cover its interest expenses and avoid potential financial distress.