Parsons Corp (PSN)

Interest coverage

		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	Dec 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	153,737	117,511	78,679	248,784	229,098	207,507	170,296	159,506	149,387	132,276	119,174	105,405	105,391	134,966	158,865	161,989	138,629	122,747	76,537	74,377
Interest expense (ttm)	US$ in thousands	48,168	43,746	38,037	31,497	30,768	28,479	25,705	23,185	18,980	16,709	17,094	17,697	20,803	22,226	21,475	20,956	17,808	17,242	19,459	23,729
Interest coverage		3.19	2.69	2.07	7.90	7.45	7.29	6.63	6.88	7.87	7.92	6.97	5.96	5.07	6.07	7.40	7.73	7.78	7.12	3.93	3.13

September 30, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $153,737K ÷ $48,168K
= 3.19

The interest coverage ratio for Parsons Corp has shown fluctuation over the past several quarters. The ratio ranged from a low of 2.07 in March 2024 to a high of 7.90 in December 2023. Generally, the company's ability to cover its interest expenses improved in the latter part of 2023 and into 2024 before declining again in the most recent quarter.

A higher interest coverage ratio indicates that Parsons Corp is more capable of servicing its interest payments from its operating income. This can suggest a lower financial risk and greater financial stability for the company. Conversely, a lower ratio may indicate potential financial strain and difficulty in meeting interest obligations.

It is important for Parsons Corp to monitor and manage its interest coverage ratio effectively to ensure it remains at a healthy level. Consistent monitoring of this ratio will help the company assess its financial health and ability to meet its debt obligations.