Parsons Corp (PSN)

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 170,958 153,737 117,511 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
Interest expense (ttm) US$ in thousands 51,582 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
Interest coverage 3.31 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

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $170,958K ÷ $51,582K
= 3.31

Based on the interest coverage data for Parsons Corp, we observe fluctuations in the ratio over the period from March 31, 2020, to December 31, 2024. The interest coverage ratio indicates the company's ability to meet its interest payments on outstanding debt obligations.

The trend in Parsons Corp's interest coverage ratio shows an initial increase from 3.93 in March 2020 to a peak of 7.92 in June 2022, reflecting an improvement in the company's ability to cover its interest expenses. However, the ratio starts to decline from September 2022 onwards, reaching 3.31 by December 31, 2024.

The company's interest coverage ratio remained above 1 throughout the period, indicating that Parsons Corp generated sufficient earnings to cover its interest payments. However, the declining trend in the ratio towards the end of the period may raise concerns about the company's ability to comfortably meet its interest obligations in the future.

It is essential for stakeholders to monitor Parsons Corp's interest coverage ratio closely to assess the company's financial health and its capacity to handle its debt burden effectively. Further analysis of the company's financial performance and debt management strategies may provide valuable insights into the factors influencing the fluctuations in the interest coverage ratio.