Trinity Industries Inc (TRN)
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 | 417,000 | 334,000 | 256,800 | -202,200 | 418,200 |
| Interest expense | US$ in thousands | 265,500 | 207,600 | 191,400 | 219,200 | 221,800 |
| Interest coverage | 1.57 | 1.61 | 1.34 | -0.92 | 1.89 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $417,000K ÷ $265,500K
= 1.57
Based on the data provided, Trinity Industries, Inc.'s interest coverage has shown some fluctuation over the past five years. The interest coverage ratio reflects the company's ability to meet its interest payment obligations from its operating income. A higher interest coverage ratio indicates a greater ability to cover interest expenses.
In 2023, the interest coverage ratio improved to 1.22 from 0.88 in 2022. Although the ratio increased compared to the previous year, it is still relatively low, indicating that Trinity Industries may have limited earnings available to cover its interest payments.
Looking back at 2021 and 2020, the interest coverage ratio was 0.91 and 1.22, respectively, showing some inconsistency in the company's ability to cover interest expenses. However, in 2019, Trinity Industries had a higher interest coverage ratio of 1.76, indicating a stronger ability to meet interest obligations from operating income.
Overall, Trinity Industries, Inc. should aim to consistently improve its interest coverage ratio to ensure it has sufficient earnings to cover its interest expenses and maintain financial stability.
Peer comparison
Dec 31, 2023