Par Pacific Holdings Inc (PARR)

Interest coverage

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	34,481	253,714	418,441	455,812	753,759	715,728	823,115	940,524	541,551	460,524	272,976	12,501	23,562	-98,324	-193,689	-137,497	-187,604	-38,938	-109,251	-30,571
Interest expense (ttm)	US$ in thousands	82,793	80,711	78,124	72,599	70,965	68,862	64,899	68,144	68,288	67,182	65,704	64,736	66,493	68,322	70,471	69,699	70,222	70,114	70,939	74,803
Interest coverage		0.42	3.14	5.36	6.28	10.62	10.39	12.68	13.80	7.93	6.85	4.15	0.19	0.35	-1.44	-2.75	-1.97	-2.67	-0.56	-1.54	-0.41

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $34,481K ÷ $82,793K
= 0.42

Par Pacific Holdings Inc's interest coverage ratio, which indicates the company's ability to meet its interest obligations with its earnings, has exhibited significant fluctuations over the period from March 31, 2020, to December 31, 2024.

The interest coverage ratio was consistently negative from March 2020 to June 2021, indicating that the company's earnings were insufficient to cover its interest expenses during that period. However, there was a notable improvement in the ratio from June 2022 onwards, with the ratio turning positive and showing a steady increase thereafter.

From March 2022 to December 2024, the interest coverage ratio experienced a substantial improvement, reaching its peak at 13.80 as of March 31, 2023. This signifies that Par Pacific Holdings Inc's earnings were significantly more than sufficient to cover its interest obligations during that period.

The trend in the interest coverage ratio suggests that the company's financial performance and ability to meet its interest payments have strengthened over the years, with a consistent positive trend observed from June 2022 onwards. This improvement may indicate better operating performance, increased profitability, or effective management of debt levels, all of which are positive signals for the company's financial health.