Shenandoah Telecommunications Co (SHEN)

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	-22,130	12,176	-1,997	5,283	-2,601
Interest expense	US$ in thousands	15,897	4,212	9,178	984,141	127,284
Interest coverage		-1.39	2.89	-0.22	0.01	-0.02

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $-22,130K ÷ $15,897K
= -1.39

Based on the provided data, Shenandoah Telecommunications Co's interest coverage ratio has shown significant fluctuations over the five-year period from December 31, 2020, to December 31, 2024.

- As of December 31, 2020, the interest coverage ratio was -0.02, indicating that the company's earnings before interest and taxes (EBIT) were insufficient to cover its interest expense. A negative interest coverage ratio is a concerning sign as it suggests that the company is not generating enough operating income to meet its interest obligations.

- By December 31, 2021, the interest coverage ratio slightly improved to 0.01, but it still remained very low, indicating a continued struggle to cover interest payments with operating income.

- The ratio further deteriorated by December 31, 2022, dropping to -0.22, which suggests a worsening financial position as the company's ability to cover interest expenses declined significantly.

- However, there was a sharp turnaround by December 31, 2023, with the interest coverage ratio improving to 2.89. This significant increase implies that the company's EBIT substantially exceeded its interest expenses during that period, reflecting a healthier financial position and improved ability to meet its interest obligations.

- Unfortunately, this positive trend was not sustained, as by December 31, 2024, the interest coverage ratio fell back to -1.39, indicating a return to a situation where the company was struggling to cover its interest payments.

Overall, the fluctuating nature of Shenandoah Telecommunications Co's interest coverage ratio over the five-year period highlights the company's varying ability to service its debt obligations from its operating income. Investors and stakeholders should closely monitor this ratio to assess the company's financial health and debt repayment capacity.