Targa Resources Inc (TRGP)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 2,626,200 | 1,729,000 | 864,800 | -1,303,700 | 192,900 |
| Interest expense | US$ in thousands | 55,100 | 19,800 | 5,200 | 34,400 | 63,400 |
| Interest coverage | 47.66 | 87.32 | 166.31 | -37.90 | 3.04 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $2,626,200K ÷ $55,100K
= 47.66
The interest coverage ratio for Targa Resources Corp has been relatively stable over the past five years, ranging from 1.62 in 2019 to 3.90 in 2022. This ratio indicates the company's ability to meet its interest obligations with its operating income. A higher interest coverage ratio is generally more favorable as it suggests the company is more capable of servicing its debt.
In 2023, Targa Resources Corp's interest coverage ratio decreased slightly to 3.83, which is still within a reasonable range. This indicates that the company's operating income is sufficient to cover its interest payments comfortably. While a slight decrease from the previous year, the ratio remains above 3, demonstrating the company's continued ability to manage its interest expenses effectively.
Overall, Targa Resources Corp's interest coverage ratio over the years reflects a consistent ability to generate enough operating income to cover its interest expenses, indicating a relatively healthy financial position in terms of debt servicing capacity.
Peer comparison
Dec 31, 2023