Union Pacific Corporation (UNP)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 9,995,000 | 9,985,000 | 9,765,000 | 9,559,000 | 9,573,000 | 9,562,000 | 10,036,000 | 10,397,000 | 10,343,000 | 10,362,000 | 10,075,000 | 10,015,000 | 9,635,000 | 9,184,000 | 8,782,000 | 7,969,000 | 8,121,000 | 8,205,000 | 8,424,000 | 8,956,000 |
| Interest expense (ttm) | US$ in thousands | 1,269,000 | 1,288,000 | 1,308,000 | 1,328,000 | 1,340,000 | 1,342,000 | 1,323,000 | 1,300,000 | 1,271,000 | 1,233,000 | 1,208,000 | 1,174,000 | 1,157,000 | 1,141,000 | 1,146,000 | 1,153,000 | 1,141,000 | 1,140,000 | 1,111,000 | 1,081,000 |
| Interest coverage | 7.88 | 7.75 | 7.47 | 7.20 | 7.14 | 7.13 | 7.59 | 8.00 | 8.14 | 8.40 | 8.34 | 8.53 | 8.33 | 8.05 | 7.66 | 6.91 | 7.12 | 7.20 | 7.58 | 8.28 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $9,995,000K ÷ $1,269,000K
= 7.88
Interest coverage ratio is a financial metric used to evaluate a company's ability to pay interest expenses on its outstanding debt. It is calculated by dividing a company's earnings before interest and taxes (EBIT) by its interest expenses.
Analyzing the interest coverage ratio of Union Pacific Corporation based on the provided data, we observe fluctuations over the quarters. The interest coverage ratio ranged from a high of 8.53 in March 2022 to a low of 6.91 in March 2021.
Overall, the interest coverage ratio for Union Pacific Corporation remained relatively stable and healthy, staying above 7 throughout the period. A ratio above 1 indicates that the company is generating more than enough earnings to cover its interest obligations, which is a positive sign for creditors and investors.
The increasing trend seen in the most recent quarters, reaching a peak of 8.40 in September 2022 before slightly decreasing to 7.88 in December 2024, suggests that the company's ability to service its interest payments has improved. This trend may indicate effective management of debt levels, profitability, and operational performance by Union Pacific Corporation.
However, it is essential for analysts to continue monitoring the interest coverage ratio to ensure that the company maintains a strong financial position and can meet its debt obligations comfortably in the long run.
Peer comparison
Dec 31, 2024
See also:
Union Pacific Corporation Interest Coverage (Quarterly Data)