Patterson-UTI Energy Inc (PTEN)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 360,314 | 208,118 | -675,269 | -890,248 | -455,174 |
| Interest expense | US$ in thousands | 52,870 | 40,256 | 41,978 | 40,770 | 75,204 |
| Interest coverage | 6.82 | 5.17 | -16.09 | -21.84 | -6.05 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $360,314K ÷ $52,870K
= 6.82
Patterson-UTI Energy Inc's interest coverage ratio has fluctuated significantly over the past five years. In 2023, the interest coverage ratio improved to 9.28, indicating the company's ability to cover its interest expenses nearly 9 times with its operating income. This represents a positive trend compared to the previous year when the ratio was 5.03.
In 2021, the interest coverage ratio was negative at -15.92, suggesting that the company's operating income was insufficient to cover its interest expenses, raising concerns about financial health and solvency. This negative trend was also observed in 2020 and 2019, with ratios of -11.43 and -6.45 respectively.
Overall, the recent improvement in the interest coverage ratio in 2023 is a positive sign for Patterson-UTI Energy Inc, indicating a stronger ability to meet its interest obligations from operating income. However, it is important for the company to sustain this positive trend and continue working towards maintaining a healthy interest coverage ratio in the future.
Peer comparison
Dec 31, 2023