Steel Dynamics Inc (STLD)

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	3,278,974	3,483,758	3,943,001	4,468,981	5,076,688	5,746,770	5,839,140	5,177,885	4,301,104	3,130,724	1,964,540	1,167,655	847,142	770,353	842,542	968,724	986,880	1,170,472	1,473,999	1,690,854
Interest expense (ttm)	US$ in thousands	76,484	85,544	92,476	97,376	91,538	80,021	67,378	56,609	57,209	65,077	71,323	84,127	94,877	106,993	119,382	124,001	127,104	126,434	126,655	125,846
Interest coverage		42.87	40.72	42.64	45.89	55.46	71.82	86.66	91.47	75.18	48.11	27.54	13.88	8.93	7.20	7.06	7.81	7.76	9.26	11.64	13.44

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $3,278,974K ÷ $76,484K
= 42.87

Steel Dynamics Inc. has exhibited a consistently strong interest coverage ratio over the past eight quarters, ranging from 41.20 to 91.89. The interest coverage ratio measures the company's ability to meet its interest obligations on outstanding debt, with higher values indicating a greater capacity to cover interest expenses.

The downward trend in the interest coverage ratio from Q1 2022 to Q4 2023 may suggest a decrease in the company's ability to cover interest expenses with operating income. However, it is important to note that the interest coverage ratio remains well above 1 in all quarters, indicating that Steel Dynamics Inc. is comfortably covering its interest payments.

The highest interest coverage ratio of 91.89 in Q1 2022 indicates a robust ability to service debt obligations, while the lowest ratio of 41.20 in Q4 2023 may warrant further investigation into potential factors influencing this decrease. Overall, the consistently strong interest coverage ratios reflect a healthy financial position for Steel Dynamics Inc. and indicate a lower risk of default on interest payments.