Royal Gold Inc (RGLD)

Interest coverage

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 Sep 30, 2019
Earnings before interest and tax (EBIT) (ttm) US$ in thousands 376,144 322,860 292,673 303,203 296,967 293,179 289,188 283,709 297,662 321,855 325,007 321,797 337,602 296,211 277,435 253,376 198,945 195,093 181,272 149,703
Interest expense (ttm) US$ in thousands 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 17,822
Interest coverage 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 8.40

September 30, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $376,144K ÷ $14,330K
= 26.25

The interest coverage ratio for Royal Gold Inc has been fluctuating over the past few quarters, indicating changes in the company's ability to cover its interest expenses. The trend shows an increasing interest coverage ratio from Dec 31, 2019, to Mar 31, 2022, with a peak at Mar 31, 2022. This indicates that the company's earnings were sufficiently higher than its interest expenses during this period.

However, there was a significant decline in the interest coverage ratio from Mar 31, 2022, to Dec 31, 2023, suggesting a potential strain on the company's ability to cover its interest payments. This trend continued into the first three quarters of 2024, with the interest coverage ratio remaining below the levels seen in the previous year.

The latest data as of Sep 30, 2024, shows an interest coverage ratio of 28.66, which has improved from the previous quarter but is still below the levels seen in the earlier periods of high coverage. This indicates that Royal Gold Inc may be experiencing better earnings to cover its interest expenses compared to the previous quarter but is not yet back to the levels seen in the more robust periods.

Overall, a fluctuating interest coverage ratio suggests that the company's ability to cover its interest expenses has varied over the periods analyzed, with recent data showing some improvement but still not back to previous levels of strong coverage.