Vulcan Materials Company (VMC)

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	1,428,700	937,800	1,020,200	876,300	883,100
Interest expense	US$ in thousands	196,100	169,200	149,300	136,000	130,200
Interest coverage		7.29	5.54	6.83	6.44	6.78

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $1,428,700K ÷ $196,100K
= 7.29

The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher ratio indicates a more favorable ability to meet interest obligations.

Vulcan Materials Co's interest coverage has shown a positive trend over the past five years, increasing from 6.62 in 2019 to 7.68 in 2023. This indicates an improvement in the company's capacity to cover its interest expenses with its operating income.

The company's interest coverage ratio has been consistently above 5 in the past five years, suggesting that Vulcan Materials Co has a strong ability to meet its interest payment obligations. An interest coverage ratio of over 5 is generally considered healthy as it indicates that the company's earnings are significantly higher than its interest expenses.

Overall, Vulcan Materials Co's interest coverage ratio demonstrates a strong financial position and an ability to comfortably meet its interest obligations, providing a favorable outlook for its financial health.