Ufp Industries Inc (UFPI)
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 | 552,864 | 684,083 | 950,184 | 737,554 | 345,826 |
| Interest expense | US$ in thousands | 12,709 | 12,842 | 15,368 | 11,218 | 9,311 |
| Interest coverage | 43.50 | 53.27 | 61.83 | 65.75 | 37.14 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $552,864K ÷ $12,709K
= 43.50
The interest coverage ratio measures a company's ability to meet its interest obligations with its earnings. For Ufp Industries Inc, the interest coverage ratio has shown a positive trend over the years, increasing from 37.14 in 2020 to 65.75 in 2021, and remaining relatively stable around the 60s in the following years.
This indicates that Ufp Industries Inc has been generating sufficient operating income to cover its interest payments comfortably. A higher interest coverage ratio signifies a lower risk of default on its debt obligations, as the company's earnings are more than adequate to service its interest expenses.
Overall, the consistent and favorable interest coverage ratios for Ufp Industries Inc suggest a healthy financial position and strong ability to meet its interest obligations, which can be reassuring for creditors and investors.