Trex Company Inc (TREX)
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 | 305,675 | 318,347 | 350,406 | 338,269 | 276,205 | 262,702 | 195,690 | 208,732 | 246,736 | 262,548 | 341,293 | 305,841 | 275,378 | 303,109 | 261,950 | 242,989 | 233,635 | 221,707 | 219,792 | 204,135 |
| Interest expense (ttm) | US$ in thousands | 10 | 2,560 | 3,289 | 4,594 | 6,574 | 4,126 | 3,392 | 2,203 | 232 | 145 | 155 | 52 | 41 | 224 | 422 | 480 | 999 | 1,503 | 2,039 | 1,969 |
| Interest coverage | 30,567.50 | 124.35 | 106.54 | 73.63 | 42.01 | 63.67 | 57.69 | 94.75 | 1,063.52 | 1,810.68 | 2,201.89 | 5,881.56 | 6,716.54 | 1,353.17 | 620.73 | 506.23 | 233.87 | 147.51 | 107.79 | 103.67 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $305,675K ÷ $10K
= 30,567.50
The interest coverage ratio of Trex Company Inc has shown significant fluctuations over the period from March 31, 2020, to December 31, 2024. The interest coverage ratio measures the company's ability to cover its interest expenses with its operating income.
Starting at a level of 103.67 on March 31, 2020, the interest coverage ratio improved consistently, reaching a peak of 6,716.54 on December 31, 2021. This upward trend indicates that Trex Company Inc's operating income was more than sufficient to cover its interest expenses during this period.
However, from March 31, 2022, to December 31, 2024, there was a significant decline in the interest coverage ratio. The ratio dropped from 5,881.56 on March 31, 2022, to 30,567.50 on December 31, 2024. Such a sharp decrease in the interest coverage ratio may indicate a reduction in operating income relative to interest expenses, which could potentially signal financial distress.
It is essential for stakeholders and investors to closely monitor Trex Company Inc's interest coverage ratio in the future to ensure that the company's earnings remain sufficient to cover its interest obligations and maintain financial stability.
Peer comparison
Dec 31, 2024