Trinity Industries Inc (TRN)
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 | 495,300 | 414,500 | 181,600 | 174,200 | -326,800 |
| Interest expense | US$ in thousands | 273,500 | 265,500 | 207,600 | 191,400 | 216,000 |
| Interest coverage | 1.81 | 1.56 | 0.87 | 0.91 | -1.51 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $495,300K ÷ $273,500K
= 1.81
The interest coverage ratio for Trinity Industries Inc has shown some fluctuation over the past five years. In December 2020, the ratio was -1.51, indicating that the company's operating income was not sufficient to cover its interest expenses, which raises concerns about its ability to meet debt obligations solely from operations.
However, there seems to have been improvement in the following years, with the ratio increasing to 0.91 in December 2021, 0.87 in December 2022, 1.56 in December 2023, and 1.81 in December 2024. Although the ratio remains below the ideal value of 2 or higher, the upward trend suggests that Trinity Industries Inc's ability to cover interest expenses with its operating income has strengthened.
It is important for stakeholders to continue monitoring this ratio to ensure that the company's profitability and cash flow remain sufficient to cover its interest obligations and support its financial health.
Peer comparison
Dec 31, 2024