Royal Gold Inc (RGLD)

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	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	429,898	376,144	322,860	292,673	303,203	296,967	293,179	289,188	283,709	297,662	321,855	325,007	321,797	337,602	296,211	277,435	253,376	198,945	195,093	181,272
Interest expense (ttm)	US$ in thousands	9,749	14,330	20,408	26,300	30,868	30,928	32,457	25,447	17,170	13,018	5,349	5,771	6,451	6,418	7,947	8,215	8,854	9,813	21,527	19,739
Interest coverage		44.10	26.25	15.82	11.13	9.82	9.60	9.03	11.36	16.52	22.87	60.17	56.32	49.88	52.60	37.27	33.77	28.62	20.27	9.06	9.18

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $429,898K ÷ $9,749K
= 44.10

The interest coverage ratio of Royal Gold Inc has shown fluctuations over the periods analyzed. The trend indicates an improving ability to cover interest expenses from operating profits, with the ratio generally increasing from December 31, 2019, to June 30, 2022. This suggests the company was in a strong position to meet its interest obligations with its operating income during this time frame.

However, starting from September 30, 2022, there was a significant decline in the interest coverage ratio, which may raise some concerns about the company's ability to comfortably cover its interest payments from its earnings. The ratio dropped to a low of 9.03 on June 30, 2023, before slightly increasing in the subsequent periods.

Overall, although the interest coverage ratio has shown some volatility, it is important for investors and stakeholders to monitor this ratio closely to ensure that Royal Gold Inc can continue to meet its interest obligations without significant financial strain.