Otter Tail Corporation (OTTR)

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	377,919	362,780	357,797	372,810	390,439	406,657	365,052	303,808	249,708	206,508	184,709	152,796	147,886	151,164	135,690	134,600	134,880	127,050	128,057	131,343
Interest expense (ttm)	US$ in thousands	37,678	37,104	37,188	36,483	36,016	36,367	36,756	37,320	37,770	37,695	36,615	35,722	34,447	33,574	32,545	31,708	31,411	31,001	31,011	30,862
Interest coverage		10.03	9.78	9.62	10.22	10.84	11.18	9.93	8.14	6.61	5.48	5.04	4.28	4.29	4.50	4.17	4.24	4.29	4.10	4.13	4.26

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $377,919K ÷ $37,678K
= 10.03

The interest coverage ratio of Otter Tail Corporation has been relatively stable over the past eight quarters, ranging from 8.14 to 11.18. This ratio indicates the company's ability to meet interest obligations on its outstanding debt.

The consistently high interest coverage ratios above 9.5 suggest that Otter Tail Corporation has generated sufficient operating income to comfortably cover its interest expenses. A higher ratio indicates a stronger ability to meet interest payments, implying lower financial risk for the company.

Despite some minor fluctuations, the overall trend in the interest coverage ratio of Otter Tail Corporation has remained favorable and indicates a healthy financial position in terms of debt servicing capacity. It is important for investors and lenders to monitor this ratio to ensure the company's continued ability to meet its interest obligations and maintain financial health.