SM Energy Co (SM)
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 | 1,005,830 | 1,516,120 | 206,520 | -792,813 | -71,942 |
| Interest expense | US$ in thousands | 91,630 | 120,346 | 160,353 | 163,892 | 159,102 |
| Interest coverage | 10.98 | 12.60 | 1.29 | -4.84 | -0.45 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,005,830K ÷ $91,630K
= 10.98
SM Energy Co's interest coverage ratio has shown a positive trend over the past five years, indicating the company's ability to meet its interest payment obligations. In particular, the ratio has improved significantly from negative figures in 2020 and 2019 to above 1 in 2021, and continued to increase in 2022 and 2023.
The interest coverage ratio of 13.75 in 2023 shows that the company's operating income is 13.75 times its interest expenses, reflecting a strong capacity to cover interest payments. This improvement suggests enhanced financial stability and creditworthiness, which may be attributed to better operational performance and cost management. However, further monitoring is advisable to ensure the sustainability of this positive trend.
Peer comparison
Dec 31, 2023