SJW Corporation (SJW)

Interest coverage

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	157,087	173,317	155,237	150,233	140,386	121,060	116,965	126,560	123,186	115,328	123,821	123,170	124,150	103,964	78,750	66,083	63,653	74,200	81,537	80,116
Interest expense (ttm)	US$ in thousands	66,144	64,815	62,261	60,105	58,062	55,844	55,189	54,629	54,339	55,272	54,911	54,410	54,255	52,341	45,755	39,289	31,796	25,212	24,701	24,071
Interest coverage		2.37	2.67	2.49	2.50	2.42	2.17	2.12	2.32	2.27	2.09	2.25	2.26	2.29	1.99	1.72	1.68	2.00	2.94	3.30	3.33

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $157,087K ÷ $66,144K
= 2.37

Interest coverage measures a company's ability to pay its interest expenses on outstanding debt with its earnings before interest and taxes (EBIT). A higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations.

Based on the data provided, SJW Group's interest coverage ratio has been relatively stable over the past eight quarters, ranging from 1.77 to 2.51. The interest coverage ratio has generally been above 2, indicating that SJW Group has sufficient earnings to cover its interest expenses. This suggests that the company has a comfortable margin of safety in meeting its interest payments.

Overall, SJW Group's interest coverage over the periods analyzed reflects a consistent ability to cover its interest expenses with its operating income, which can be a positive indicator of financial health and stability.