Vulcan Materials Company (VMC)

Interest coverage

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	1,427,300	1,248,700	1,135,200	991,700	951,500	971,400	928,400	908,300	1,010,800	995,830	1,021,534	1,032,930	895,731	892,876	908,148	885,326	877,458	870,374	816,182	770,951
Interest expense (ttm)	US$ in thousands	196,000	168,900	168,900	169,100	169,200	149,969	149,941	149,571	149,301	136,157	136,012	136,007	135,999	30,909	63,079	96,089	129,001	131,023	132,373	132,582
Interest coverage		7.28	7.39	6.72	5.86	5.62	6.48	6.19	6.07	6.77	7.31	7.51	7.59	6.59	28.89	14.40	9.21	6.80	6.64	6.17	5.81

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,427,300K ÷ $196,000K
= 7.28

Interest coverage is a key financial ratio that indicates a company's ability to meet its interest obligations with its operating income. A higher interest coverage ratio suggests that a company is more capable of servicing its debt obligations.

Based on the data provided for Vulcan Materials Co from Q1 2022 to Q4 2023, we observe a fairly consistent trend in interest coverage ratios, ranging from 5.78 to 7.68. This indicates that the company has maintained a healthy ability to cover its interest expenses with its operating income throughout the periods analyzed.

Vulcan Materials Co's interest coverage ratio has generally remained above 5, which is considered a minimum threshold for financial health. The increasing trend observed from Q1 2022 to Q4 2023 suggests an improving ability to cover interest expenses over time. However, fluctuations in the ratio also indicate some variability in the company's operating performance and profitability during these periods.

Overall, with interest coverage ratios consistently above 5 and showing an upward trend, Vulcan Materials Co appears to have a solid financial position and the ability to meet its interest obligations comfortably. Investors and creditors may view this as a positive indicator of the company's financial stability and operational efficiency.