Sterling Construction Company Inc (STRL)

Interest coverage

Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Earnings before interest and tax (EBIT) (ttm) US$ in thousands 375,179 354,437 249,342 215,042 221,197 211,853 192,534 181,303 163,558 160,359 146,771 129,250 117,751 110,888 115,210 112,411 112,876 102,697 87,178 72,157
Interest expense (ttm) US$ in thousands 23,823 25,255 26,267 27,238 28,456 29,320 28,906 26,783 23,532 20,654 17,952 16,737 17,994 19,348 22,500 25,758 27,578 29,377 30,235 26,082
Interest coverage 15.75 14.03 9.49 7.89 7.77 7.23 6.66 6.77 6.95 7.76 8.18 7.72 6.54 5.73 5.12 4.36 4.09 3.50 2.88 2.77

March 31, 2025 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $375,179K ÷ $23,823K
= 15.75

The interest coverage ratios for Sterling Construction Company Inc. over the specified periods demonstrate a trend of gradual improvement, indicating an increasing ability to meet interest obligations with operating earnings. Starting from a ratio of 2.77 on June 30, 2020, the ratio steadily increased through subsequent quarters, reaching 7.77 by March 31, 2024. This progression suggests that the company’s earnings before interest and taxes (EBIT) have grown relative to its interest expenses, reflecting improving financial health and reduced creditor risk over time.

Particularly notable is the significant escalation in the ratio beginning in late 2023, with a jump from 7.23 on December 31, 2023, to 14.03 on December 31, 2024, and further to 15.75 by March 31, 2025. Such substantial increases imply a considerable enhancement in the company's EBIT or a reduction in interest expenses, or both, which has strengthened its capacity to cover interest obligations comfortably.

Overall, the trend indicates a consistent and substantial strengthening of the company's interest coverage capacity, pointing towards improved profitability, better debt management, and a more robust financial position over the analyzed period.


Peer comparison

Mar 31, 2025