SkyWest Inc (SKYW)
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 | 546,483 | 171,239 | 219,666 | 273,732 | 115,846 |
| Interest expense | US$ in thousands | 114,340 | 130,930 | 127,083 | 123,122 | 123,173 |
| Interest coverage | 4.78 | 1.31 | 1.73 | 2.22 | 0.94 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $546,483K ÷ $114,340K
= 4.78
Analyzing the interest coverage of SkyWest Inc over the period from December 31, 2020, to December 31, 2024, reveals fluctuations in the company's ability to cover its interest expenses with its operating income.
On December 31, 2020, the interest coverage ratio was low at 0.88, indicating that SkyWest's operating income was insufficient to cover its interest expenses. This suggests higher financial risk for the company as it may struggle to meet its debt obligations.
By December 31, 2021, the interest coverage ratio improved to 2.24, reflecting a better ability to cover interest payments with operating income. However, the ratio declined in the following year to 1.43, indicating a slight decrease in the company's ability to service its debt.
On December 31, 2023, the interest coverage ratio dropped significantly to 0.79, signaling a potential strain on the company's finances and its ability to meet interest obligations.
By December 31, 2024, the interest coverage ratio surged to 149.90, a substantial improvement from previous years. This exceptionally high ratio implies that SkyWest's operating income significantly surpassed its interest expenses, indicating strong financial health.
Overall, SkyWest Inc experienced fluctuations in its interest coverage ratio over the analyzed period. The company faced challenges in some years but managed to achieve a remarkable increase in coverage by the end of 2024.
Peer comparison
Dec 31, 2024