Quanta Services Inc (PWR)
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 | 1,414,720 | 1,156,870 | 838,471 | 631,937 | 609,069 |
| Interest expense | US$ in thousands | 202,687 | 186,913 | 124,363 | 68,899 | 45,013 |
| Interest coverage | 6.98 | 6.19 | 6.74 | 9.17 | 13.53 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,414,720K ÷ $202,687K
= 6.98
Based on the provided data, Quanta Services Inc's interest coverage has shown a decreasing trend over the past five years. The interest coverage ratio, which indicates the company's ability to meet its interest payment obligations, was 13.53 times as of December 31, 2020. However, this ratio declined to 9.17 times by the end of December 31, 2021, signaling a reduced capacity to cover interest expenses.
Furthermore, the trend continues to show a decline as of December 31, 2022, where the interest coverage ratio dropped to 6.74 times. This suggests that the company may be experiencing increased financial strain in meeting its interest obligations. By December 31, 2023, the ratio decreased further to 6.19 times, indicating a continued downward trend in the company's ability to cover interest expenses.
However, there was a slight improvement by the end of December 31, 2024, with the interest coverage ratio increasing to 6.98 times. While this shows some positive movement, the ratio still remains below the levels observed at the beginning of the period under review. Overall, the data suggests that Quanta Services Inc's ability to cover interest payments has weakened over the years, and investors may need to monitor this trend closely for signs of financial distress.
Peer comparison
Dec 31, 2024