EchoStar Corporation (SATS)
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 | -557,192 | -1,845,280 | 3,414,520 | 223,859 | 120,092 |
| Interest expense | US$ in thousands | 481,622 | 90,357 | 57,170 | 95,512 | 147,927 |
| Interest coverage | -1.16 | -20.42 | 59.73 | 2.34 | 0.81 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $-557,192K ÷ $481,622K
= -1.16
The interest coverage ratio reflects a company's ability to meet its interest payments on outstanding debt with its operating income. In the case of EchoStar Corporation, the trend in interest coverage is as follows:
- December 31, 2020: The interest coverage ratio was 0.81, indicating that the company may have had difficulty meeting its interest obligations with its operating income during this period.
- December 31, 2021: The interest coverage ratio improved to 2.34, suggesting a better ability to cover interest expenses with operating income compared to the previous year.
- December 31, 2022: The interest coverage ratio significantly increased to 59.73, reflecting a strong ability to service interest payments using operating income, which is a positive indicator for financial health.
- December 31, 2023: The interest coverage ratio declined sharply to -20.42, implying that the company's operating income may not have been sufficient to cover interest expenses during this period. A negative interest coverage ratio raises concerns about the company's financial stability.
- December 31, 2024: The interest coverage ratio further worsened to -1.16, indicating a continued struggle to meet interest obligations with operating income.
In summary, EchoStar Corporation's interest coverage ratio has shown volatility over the years, with significant fluctuations between positive and negative values. It is important for the company to improve its interest coverage ratio consistency to ensure sustainability and financial stability.
Peer comparison
Dec 31, 2024