Service Corporation International (SCI)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 947,709 | 927,041 | 1,195,800 | 824,893 | 650,100 |
| Interest expense | US$ in thousands | 239,447 | 172,109 | 150,610 | 163,063 | 185,843 |
| Interest coverage | 3.96 | 5.39 | 7.94 | 5.06 | 3.50 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $947,709K ÷ $239,447K
= 3.96
Service Corp. International's interest coverage ratio has been fluctuating over the past five years. The ratio declined from 7.74 in 2021 to 3.90 in 2023. This decrease indicates that the company's ability to cover its interest expenses with its operating income has weakened. Although the ratio remains above 1, indicating that the company is generating enough operating income to cover its interest payments, the downward trend raises concerns about the company's financial health and its ability to service its debt obligations in the long term. It is important for investors and creditors to closely monitor this ratio to assess the company's debt repayment capacity.
Peer comparison
Dec 31, 2023