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