One Gas Inc (OGS)

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	387,066	345,774	307,051	300,496	292,282
Interest expense	US$ in thousands	115,339	77,506	60,301	62,505	62,681
Interest coverage		3.36	4.46	5.09	4.81	4.66

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $387,066K ÷ $115,339K
= 3.36

ONE Gas Inc's interest coverage ratio has shown a decreasing trend over the past five years. The ratio, which measures the company's ability to meet its interest obligations, has gradually declined from 5.15 in 2021 to 3.27 in 2023. This suggests that the company's ability to cover its interest expenses with its operating profits has weakened over time. Although the ratios above 1 indicate that ONE Gas Inc is generating enough operating income to cover its interest payments, the decreasing trend warrants attention as it may indicate a potential strain on the company's ability to meet its debt obligations in the future. It is recommended for stakeholders to closely monitor this trend and assess the company's overall financial health and debt management strategies.