Southwest Gas Holdings Inc (SWX)
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 | 485,007 | 31,144 | 7,724 | -52,939 | -36,193 | 374,306 | 341,673 | 355,942 | 359,625 | 402,415 | 437,782 | 454,763 | 409,554 | 395,268 | 377,923 | 359,581 | 379,185 | 361,318 | 365,960 | 361,353 |
| Interest expense (ttm) | US$ in thousands | 292,286 | 295,487 | 287,862 | 271,721 | 242,750 | 203,939 | 170,864 | 143,597 | 119,198 | 109,537 | 106,550 | 107,061 | 111,477 | 111,705 | 110,828 | 111,209 | 109,226 | 106,502 | 103,616 | 100,437 |
| Interest coverage | 1.66 | 0.11 | 0.03 | -0.19 | -0.15 | 1.84 | 2.00 | 2.48 | 3.02 | 3.67 | 4.11 | 4.25 | 3.67 | 3.54 | 3.41 | 3.23 | 3.47 | 3.39 | 3.53 | 3.60 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $485,007K ÷ $292,286K
= 1.66
Interest coverage measures a company's ability to pay its interest expenses on outstanding debt. For Southwest Gas Holdings Inc, the interest coverage ratio has been relatively stable over the past few quarters, ranging from 1.85 to 2.63, with the latest value at 2.03 in Q4 2023.
The trend indicates that Southwest Gas Holdings Inc has been able to comfortably cover its interest obligations with its operating income. A ratio above 1 suggests that the company is generating enough income to cover its interest payments, with higher ratios indicating stronger financial health.
While the ratios have fluctuated slightly, the overall picture suggests that Southwest Gas Holdings Inc has maintained a reasonable level of interest coverage, which is a positive sign for investors and lenders. It is important for the company to continue monitoring its interest coverage to ensure it remains at healthy levels and to manage its debt efficiently.
Peer comparison
Dec 31, 2023