Reliance Steel & Aluminum Co (RS)
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 | 1,177,400 | 1,780,800 | 2,515,000 | 1,967,300 | 701,400 |
| Interest expense | US$ in thousands | 40,300 | 40,100 | 62,300 | 62,700 | 62,900 |
| Interest coverage | 29.22 | 44.41 | 40.37 | 31.38 | 11.15 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,177,400K ÷ $40,300K
= 29.22
The interest coverage ratio of Reliance Steel & Aluminum Co has shown a consistent improvement over the previous five years, indicating the company's ability to cover its interest expenses through its operating income. The ratio stood at 11.15 on December 31, 2020, and has since increased steadily to reach 29.22 by December 31, 2024. This upward trend indicates a strengthening financial position and suggests that the company has been able to generate sufficient earnings to comfortably meet its interest obligations. The significant increase in the interest coverage ratio over the years reflects a positive outlook for the company's financial health and ability to manage its debt effectively.