Trex Company Inc (TREX)
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 | 305,673 | 276,204 | 246,735 | 275,376 | 233,635 |
| Interest expense | US$ in thousands | 11 | 5 | 30,743 | 90,993 | 999 |
| Interest coverage | 27,788.45 | 55,240.80 | 8.03 | 3.03 | 233.87 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $305,673K ÷ $11K
= 27,788.45
The interest coverage ratio of Trex Company Inc has shown significant fluctuations over the past five years. As of December 31, 2020, the interest coverage ratio stood at a robust 233.87, indicating that the company's earnings were more than sufficient to cover its interest expenses over that period.
However, there was a notable decrease in the interest coverage ratio by December 31, 2021, with the ratio dropping to 3.03. This sharp decline suggests that the company's earnings may have decreased relative to its interest expenses, potentially raising concerns about its ability to meet interest obligations comfortably.
By December 31, 2022, the interest coverage ratio improved to 8.03, showing a recovery in the company's ability to cover its interest payments with earnings. This suggests a positive trend in the company's financial performance compared to the previous year.
The interest coverage ratio then saw a substantial surge to 55,240.80 by December 31, 2023, indicating a significant improvement in the company's ability to pay its interest expenses. This remarkable increase may be attributed to a substantial rise in earnings relative to interest costs during that year.
As of December 31, 2024, the interest coverage ratio remained strong at 27,788.45, indicating continued financial health and ability to comfortably meet interest obligations.
In conclusion, despite some fluctuations, the interest coverage ratio of Trex Company Inc generally demonstrates a strong ability to cover interest expenses over the analyzed period, with notable improvements and recoveries in certain years.
Peer comparison
Dec 31, 2024