Southwest Gas Holdings Inc (SWX)
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 | 485,007 | -36,193 | 359,625 | 409,554 | 379,185 |
| Interest expense | US$ in thousands | 292,286 | 242,750 | 119,198 | 111,477 | 109,226 |
| Interest coverage | 1.66 | -0.15 | 3.02 | 3.67 | 3.47 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $485,007K ÷ $292,286K
= 1.66
Southwest Gas Holdings Inc's interest coverage ratio has shown some fluctuations over the past five years. In 2023, the interest coverage ratio improved to 2.03, indicating that the company generated enough operating income to cover its interest expenses with some buffer. However, compared to 2021 and 2022, where the ratios were higher at 3.24 and 1.91 respectively, the 2023 figure shows a slight decrease. This suggests that the company may have experienced a slight decline in its ability to cover interest payments in 2023.
Overall, Southwest Gas Holdings Inc's interest coverage ratio has been relatively stable over the past five years, staying above 1 (which is generally considered a minimum acceptable level). The ratios from 2020 to 2023 indicate that the company has been able to comfortably cover its interest expenses with its operating income, although there was a noticeable decrease from 2022 to 2023. The company's ability to service its debt obligations is essential for its financial health and sustainability.
Peer comparison
Dec 31, 2023