Sempra Energy (SRE)
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 | 4,874,000 | 3,749,000 | 2,615,000 | 5,094,000 | 3,447,000 |
| Interest expense | US$ in thousands | 1,309,000 | 1,054,000 | 1,198,000 | 1,081,000 | 1,077,000 |
| Interest coverage | 3.72 | 3.56 | 2.18 | 4.71 | 3.20 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $4,874,000K ÷ $1,309,000K
= 3.72
The interest coverage ratio for Sempra has been showing a positive trend over the past five years, indicating the company's ability to meet its interest obligations from its operating earnings. The ratio has generally been above 3, suggesting that Sempra has a healthy buffer to cover its interest expenses. The increasing trend from 3.24 in 2019 to 4.26 in 2023 reflects a strengthening financial position and improved profitability over time. This indicates that the company has been generating sufficient earnings to comfortably cover its interest payments, which is a positive sign for investors and lenders.
Peer comparison
Dec 31, 2023