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.
Peer comparison
Dec 31, 2023