Quanta Services Inc (PWR)
Interest coverage
| 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 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 1,150,869 | 1,086,209 | 950,732 | 825,188 | 807,795 | 681,763 | 672,556 | 685,738 | 685,773 | 721,374 | 712,608 | 657,104 | 609,996 | 591,482 | 556,386 | 525,050 | 634,406 | 611,390 | 579,084 | 617,870 |
| Interest expense (ttm) | US$ in thousands | 186,913 | 174,843 | 160,878 | 141,328 | 124,363 | 112,989 | 96,682 | 81,152 | 68,899 | 54,147 | 47,937 | 43,482 | 45,013 | 52,533 | 59,853 | 67,020 | 66,890 | 59,836 | 50,686 | 44,043 |
| Interest coverage | 6.16 | 6.21 | 5.91 | 5.84 | 6.50 | 6.03 | 6.96 | 8.45 | 9.95 | 13.32 | 14.87 | 15.11 | 13.55 | 11.26 | 9.30 | 7.83 | 9.48 | 10.22 | 11.42 | 14.03 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,150,869K ÷ $186,913K
= 6.16
Quanta Services, Inc.'s interest coverage ratio has shown relatively stable performance over the past eight quarters. The interest coverage ratio measures the company's ability to meet its interest obligations using its operating income.
The interest coverage ratio for Quanta Services, Inc. ranged from a low of 6.18 in Q2 2023 to a high of 8.79 in Q1 2022. A ratio above 1 indicates that the company is generating enough operating income to cover its interest expenses. Quanta Services, Inc. has maintained a healthy interest coverage ratio above 6 for the past two years, indicating that the company has a comfortable margin of safety to meet its interest payments.
The company's interest coverage ratio peaked in Q1 2022 at 8.79 and has since declined but remained within a relatively narrow range between 6.18 and 6.51. While the slight decrease in the interest coverage ratio may signal a slightly lower ability to cover interest expenses, the overall trend shows that Quanta Services, Inc. has maintained a robust financial position with strong interest coverage capabilities.
Peer comparison
Dec 31, 2023