Valaris Ltd (VAL)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 53,500 | 37,200 | -4,824,300 | 358,700 | -267,400 |
| Interest expense | US$ in thousands | 79,500 | 47,500 | 290,600 | 428,300 | 282,700 |
| Interest coverage | 0.67 | 0.78 | -16.60 | 0.84 | -0.95 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $53,500K ÷ $79,500K
= 0.67
Based on the data provided, it appears that there was no interest coverage ratio reported for Valaris Ltd for the years ending December 31, 2023 and December 31, 2022. However, for the year ending December 31, 2021, the interest coverage ratio was -111.92.
An interest coverage ratio of -111.92 indicates that Valaris Ltd's earnings before interest and taxes (EBIT) were insufficient to cover its interest expenses for the year. This suggests a significant financial risk, as the company's ability to meet its interest obligations appears to be severely strained.
It is important for Valaris Ltd to improve its interest coverage ratio in order to demonstrate that it has the financial capacity to comfortably service its debt obligations. Further examination of the company's financial performance and capital structure would be necessary to understand the reasons behind the negative interest coverage and to implement strategic measures to enhance financial stability.
Peer comparison
Dec 31, 2023