Oceaneering International Inc (OII)
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 | 246,270 | 181,328 | 110,863 | 39,799 | -446,079 |
| Interest expense | US$ in thousands | 37,917 | 36,523 | 38,215 | 38,810 | 43,900 |
| Interest coverage | 6.49 | 4.96 | 2.90 | 1.03 | -10.16 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $246,270K ÷ $37,917K
= 6.49
Interest coverage is a crucial financial ratio that indicates a company's ability to meet its interest obligations from its operating income. A ratio below 1 indicates that the company is not generating enough operating income to cover its interest expenses, which can be a red flag for investors and creditors.
Oceaneering International Inc's interest coverage has shown a significant improvement over the past few years. In December 2020, the interest coverage ratio was negative at -10.16, indicating that the company's operating income was not sufficient to cover its interest expenses. However, by December 2021, the ratio improved to 1.03, signaling a slight improvement in the company's ability to cover its interest payments.
The trend continued to improve in the following years, with the interest coverage ratio reaching 2.90 in December 2022, 4.96 in December 2023, and 6.49 in December 2024. These increasing ratios reflect a stronger ability of Oceaneering International Inc to meet its interest obligations from its operating income.
Overall, the improving trend in Oceaneering International Inc's interest coverage ratios indicates a positive development in the company's financial health and its ability to manage its debt obligations. Investors and creditors may view this trend as a good sign of the company's financial stability and sustainability.
Peer comparison
Dec 31, 2024