Par Pacific Holdings Inc (PARR)

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	43,775	685,756	442,452	-13,679	-361,849
Interest expense	US$ in thousands	82,793	72,450	68,288	66,493	70,222
Interest coverage		0.53	9.47	6.48	-0.21	-5.15

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $43,775K ÷ $82,793K
= 0.53

The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. Looking at the data provided, for Par Pacific Holdings Inc:

1. On December 31, 2020, the interest coverage ratio was -5.15. This indicates that the company's operating income was insufficient to cover its interest expenses, suggesting a potential financial vulnerability.

2. By December 31, 2021, the interest coverage ratio improved slightly to -0.21. Although still negative, it shows a slight recovery in the company's ability to meet its interest obligations.

3. Subsequently, there was a significant improvement in the interest coverage ratio by December 31, 2022, reaching 6.48. This suggests that the company's operating income was more than sufficient to cover its interest expenses, indicating a stronger financial position.

4. The positive trend continued in the following years, with the interest coverage ratios on December 31, 2023 (9.47) and December 31, 2024 (0.53) further demonstrating the company's ability to comfortably meet its interest payments.

Overall, the data illustrates a fluctuating trend in Par Pacific Holdings Inc.'s ability to cover its interest expenses, showing periods of financial strain followed by significant improvements, indicating a varying financial performance over the years.