Tegna Inc (TGNA)

Interest coverage

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 Mar 31, 2020
Earnings before interest and tax (EBIT) (ttm) US$ in thousands 786,624 666,046 599,300 621,224 659,597 838,260 906,162 966,973 1,007,182 895,589 874,577 849,419 833,062 1,011,938 1,023,708 915,974 893,977 693,137 593,005 644,975
Interest expense (ttm) US$ in thousands 169,238 170,187 171,317 172,366 172,904 173,167 173,155 173,308 174,022 176,055 179,126 182,785 185,650 189,132 194,551 199,819 210,294 221,037 221,595 216,045
Interest coverage 4.65 3.91 3.50 3.60 3.81 4.84 5.23 5.58 5.79 5.09 4.88 4.65 4.49 5.35 5.26 4.58 4.25 3.14 2.68 2.99

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $786,624K ÷ $169,238K
= 4.65

The interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt with its operating income. It is calculated by dividing earnings before interest and taxes (EBIT) by the amount of interest expense. A higher ratio indicates a better ability to cover interest payments.

Based on the data provided for Tegna Inc, the interest coverage ratio has shown some fluctuations over the quarters. In March 2020, the ratio was 2.99, indicating that the company's EBIT was nearly three times its interest expense. The ratio decreased slightly to 2.68 in June 2020 but started to trend upwards thereafter. By December 2020, the ratio had increased to 4.25 and continued to improve, reaching a peak of 5.79 by December 2022.

From March 2023 onwards, the interest coverage ratio showed a declining trend, dropping to 3.60 by March 2024. This could indicate either a decrease in operating income or an increase in interest expenses during this period. However, despite the decline, the ratio remained above 3.0, which is generally considered the minimum acceptable level for most investors and creditors.

Overall, Tegna Inc's interest coverage ratio has displayed resilience and remained relatively healthy throughout the period under consideration, indicating a reasonable ability to meet its interest obligations. Investors and creditors may view this favorably as it suggests the company has sufficient earnings to cover its interest expenses.