Ryder System Inc (R)
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 | 1,047,000 | 914,000 | 1,448,000 | 904,000 | 121,000 |
| Interest expense | US$ in thousands | 386,000 | 296,000 | 228,000 | 214,000 | 261,000 |
| Interest coverage | 2.71 | 3.09 | 6.35 | 4.22 | 0.46 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,047,000K ÷ $386,000K
= 2.71
Interest coverage ratio is a crucial financial metric used to evaluate a company's ability to meet its interest payments on outstanding debt. It indicates the company's capacity to generate earnings relative to its interest expenses.
Analyzing the data provided for Ryder System Inc:
- As of December 31, 2020, the interest coverage ratio was notably low at 0.46, which may raise concerns about the company's ability to cover its interest obligations with its earnings.
- However, there was a significant improvement in the interest coverage ratio to 4.22 as of December 31, 2021, indicating that the company's earnings were more sufficient to cover its interest expenses.
- The trend continued positively with the interest coverage ratio increasing to 6.35 as of December 31, 2022, reflecting a further strengthening of the company's ability to meet its interest payments comfortably.
- By December 31, 2023, the interest coverage ratio decreased to 3.09, indicating a slight decline in the company's ability to cover its interest expenses. It might be worth monitoring this trend to ensure sustainability.
- As of December 31, 2024, the interest coverage ratio further decreased to 2.71, suggesting a potential challenge in covering interest payments with current earnings.
In conclusion, while there have been fluctuations in Ryder System Inc's interest coverage ratio over the years, the company has shown improvement in its ability to cover interest expenses. It is essential for investors and stakeholders to closely monitor this ratio to assess the company's financial health and its ability to meet its debt obligations in the future.
Peer comparison
Dec 31, 2024