Vulcan Materials Company (VMC)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,363,300 | 1,439,100 | 882,900 | 1,021,100 | 877,472 |
| Interest expense | US$ in thousands | 191,200 | 196,100 | 168,400 | 147,700 | 134,393 |
| Interest coverage | 7.13 | 7.34 | 5.24 | 6.91 | 6.53 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,363,300K ÷ $191,200K
= 7.13
The interest coverage ratio for Vulcan Materials Company has shown fluctuations over the past few years. As of December 31, 2020, the interest coverage ratio stood at 6.53, indicating that the company generated 6.53 times more operating income than the interest expenses incurred.
By December 31, 2021, the interest coverage ratio improved slightly to 6.91, suggesting a slightly stronger ability to meet its interest obligations from operating income. However, by December 31, 2022, the ratio decreased to 5.24, indicating a slight decline in the company's ability to cover its interest payments with operating income.
Despite the dip in 2022, the interest coverage ratio rebounded significantly by December 31, 2023, reaching 7.34, showcasing an improved ability to cover interest expenses with operating income. This positive trend continued into December 31, 2024, with the ratio at 7.13, indicating a solid position in terms of generating operating income relative to interest expenses.
Overall, although there were fluctuations in Vulcan Materials Company's interest coverage ratio over the years, the general trend showed periods of stability and improvement, suggesting a reasonable ability to meet interest obligations with operating income. Further monitoring of this ratio will be essential to gauge the company's ongoing financial health and ability to service its debt obligations.
Peer comparison
Dec 31, 2024