Valmont Industries Inc (VMI)
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 | 297,778 | 433,249 | 286,785 | 225,953 | 227,905 |
| Interest expense | US$ in thousands | 56,808 | 47,534 | 42,612 | 41,075 | 40,153 |
| Interest coverage | 5.24 | 9.11 | 6.73 | 5.50 | 5.68 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $297,778K ÷ $56,808K
= 5.24
The interest coverage ratio for Valmont Industries Inc has fluctuated over the past five years. It was highest in 2022 at 9.11 and lowest in 2020 at 5.50. This ratio indicates the company's ability to meet its interest obligations from its earnings before interest and taxes (EBIT). A higher interest coverage ratio signifies that the company is more capable of servicing its debt and indicates a lower risk of default. Valmont's interest coverage has generally been at healthy levels above 5 in the recent years, demonstrating a relatively strong ability to cover its interest expenses. However, the decrease in the ratio from 2022 to 2023 may suggest a reduction in earnings relative to interest expenses, warranting further monitoring of the company's financial performance.
Peer comparison
Dec 31, 2023