TRI Pointe Homes Inc (TPH)

Interest coverage

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	576,867	428,010	779,340	646,071	391,858
Interest expense	US$ in thousands	—	147,169	24,326	92,783	83,120
Interest coverage		—	2.91	32.04	6.96	4.71

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $576,867K ÷ $—K
= —

The interest coverage ratio for TRI Pointe Homes Inc has shown some fluctuations over the years. In December 31, 2020, the ratio was at 4.71, indicating that the company's operating income was able to cover its interest expenses approximately 4.71 times. Moving to December 31, 2021, the interest coverage ratio improved to 6.96, suggesting a stronger ability to meet interest obligations from operating profits.

In December 31, 2022, the interest coverage ratio surged significantly to 32.04, signaling a very robust ability to cover interest expenses with operating income, which could be attributed to an increase in operating profits or a decrease in interest expenses. However, it is important to note that such a high ratio may also imply potential underutilization of debt to maximize returns.

Subsequently, by December 31, 2023, the interest coverage ratio dropped to 2.91, indicating a decline in the company's ability to cover its interest payments with operating income. A lower ratio like this may raise concerns about the company's financial health and ability to service its debt obligations.

Lastly, the data shows that there is no available information for December 31, 2024, suggesting that the interest coverage ratio for that period is not provided.

Overall, the trend in TRI Pointe Homes Inc's interest coverage ratio demonstrates varying levels of ability to meet interest obligations with operating profits over the years. It is crucial for stakeholders to closely monitor this ratio to assess the company's financial stability and risk of default.