UNITIL Corporation (UTL)

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	93,300	80,900	74,800	68,800	84,600
Interest expense	US$ in thousands	34,900	28,300	27,200	26,400	26,600
Interest coverage		2.67	2.86	2.75	2.61	3.18

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $93,300K ÷ $34,900K
= 2.67

Interest coverage is a financial ratio that indicates a company's ability to cover its interest payments on outstanding debt with its operating income. A higher interest coverage ratio is typically preferable as it suggests the company is more capable of meeting its interest obligations.

Unitil Corp.'s interest coverage ratio has shown stability over the past five years, ranging from 3.00 to 3.16. The consistency in this range indicates that the company has consistently generated operating income at least three times greater than its interest expenses. This is a positive sign of financial health as it suggests that the company has a comfortable buffer to meet its interest obligations even in periods of economic downturn or fluctuating earnings.

The slight fluctuations in the interest coverage ratio over the years are relatively minor and do not indicate any significant concerns regarding the company's ability to service its debt. Overall, Unitil Corp.'s interest coverage ratio suggests that the company has maintained a healthy balance between its earnings and interest payments, which is a favorable indication for investors and creditors.