UGI Corporation (UGI)
Interest coverage
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | -1,458,000 | 1,715,000 | 2,299,000 | 989,000 | 607,000 |
| Interest expense | US$ in thousands | 379,000 | 329,000 | 310,000 | 322,000 | 258,000 |
| Interest coverage | -3.85 | 5.21 | 7.42 | 3.07 | 2.35 |
September 30, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $-1,458,000K ÷ $379,000K
= -3.85
Based on the provided data, UGI Corp.'s interest coverage ratio has fluctuated over the past five years. In 2023, the interest coverage ratio notably declined to -1.96, indicating that the company's operating income was insufficient to cover its interest expenses. This may raise concerns about UGI Corp.'s ability to meet its debt obligations.
In contrast, the interest coverage ratio was healthier in 2022 and 2021, standing at 5.06 and 7.69, respectively. This suggests that the company's operating income was relatively strong enough to cover its interest expenses during these years.
However, in 2020 and 2019, the interest coverage ratio was 3.35 and 2.52, respectively, indicating a moderate ability to cover interest payments.
Overall, the fluctuation in UGI Corp.'s interest coverage ratio over the past five years may reflect changes in the company's operating performance and the cost of debt. It's essential to closely monitor this ratio to assess UGI Corp.'s ability to service its debt and manage financial risk.
Peer comparison
Sep 30, 2023