RXO Inc. (RXO)
Interest coverage
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | ||
|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 39,000 | 24,000 | 33,000 |
| Interest expense (ttm) | US$ in thousands | 24,008 | 21,008 | 33,000 |
| Interest coverage | 1.62 | 1.14 | 1.00 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $39,000K ÷ $24,008K
= 1.62
Interest coverage is a financial ratio used to measure a company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio indicates a stronger ability to meet interest obligations.
Based on the data provided for RXO Inc., the interest coverage ratio has been fluctuating over the past three quarters. The interest coverage ratio was 1.62 as of December 31, 2023, indicating that the company generated 1.62 times the operating income needed to cover its interest expense for that period. This implies a relatively comfortable position in meeting interest payments.
In the previous quarters, the interest coverage ratios were 1.14 as of September 30, 2023, and 1.00 as of June 30, 2023. Although these ratios were lower than the latest ratio, they still showed that RXO Inc. was able to cover its interest expenses with operating income during those periods.
Overall, the trend in RXO Inc.'s interest coverage ratio appears to be improving, as seen in the most recent quarter. However, it would be beneficial for the company to continue monitoring and managing its interest expenses relative to its operating income to maintain a healthy financial position.
Peer comparison
Dec 31, 2023