One Gas Inc (OGS)
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 | 406,471 | 387,066 | 345,774 | 307,051 | 298,445 |
| Interest expense | US$ in thousands | 147,235 | 115,339 | 77,506 | 60,301 | 62,505 |
| Interest coverage | 2.76 | 3.36 | 4.46 | 5.09 | 4.77 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $406,471K ÷ $147,235K
= 2.76
The interest coverage ratios of One Gas Inc have shown some fluctuation over the years. In 2020, the company's interest coverage ratio was 4.77, indicating that it earned 4.77 times more operating income than the amount needed to cover its interest expenses. This ratio improved slightly to 5.09 in 2021 but then declined to 4.46 in 2022.
However, in 2023, the interest coverage ratio decreased more significantly to 3.36, suggesting a potential strain on the company's ability to cover its interest obligations with its operating income. By 2024, this ratio fell further to 2.76, indicating a higher risk level as the company earned only 2.76 times its interest expense amount.
The declining trend in interest coverage ratios from 2020 to 2024 raises concerns about One Gas Inc's ability to manage its debt obligations relative to its operating profitability. It may need to closely monitor its financial position and consider strategies to improve its interest coverage ratio in order to maintain financial stability.
Peer comparison
Dec 31, 2024