Viper Energy Ut (VNOM)

Interest coverage

		Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	566,058	673,284	636,825	620,219	636,200	566,786	644,133	680,482	647,706	566,604	457,021	361,572	206,637	145,661	70,897	52,914	139,044	154,297	198,773	193,540
Interest expense (ttm)	US$ in thousands	71,721	66,185	58,809	48,907	42,431	41,959	40,450	40,409	40,041	37,638	35,829	34,044	32,291	24,541	17,146	9,860	2,032	1,689	1,336	978
Interest coverage		7.89	10.17	10.83	12.68	14.99	13.51	15.92	16.84	16.18	15.05	12.76	10.62	6.40	5.94	4.13	5.37	68.43	91.35	148.78	197.89

September 30, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $566,058K ÷ $71,721K
= 7.89

The interest coverage ratio for Viper Energy Ut has shown fluctuating levels over the past few years. The ratio indicates the company's ability to meet its interest obligations from its operating earnings.

From Dec 2019 to Mar 2020, there was a sharp increase in interest coverage, indicating a significant improvement in the company's ability to cover interest expenses. This trend continued until Sep 2020, where the ratio reached a high value of 68.43. This suggests a healthy financial position and a strong ability to service debt obligations.

However, from Dec 2020 to Jun 2021, there was a noticeable decline in the interest coverage ratio, indicating a potential decrease in earnings relative to interest expenses. This downward trend continued until Dec 2021, where the ratio dropped to a low value of 6.40, signaling potential challenges in meeting interest payments.

From Mar 2022 onwards, there was a gradual improvement in the interest coverage ratio, suggesting a recovery in the company's ability to cover interest expenses. The ratio increased steadily, reaching a value of 16.84 by Jun 2023. This positive trend indicates improved financial health and better capacity to meet interest obligations.

Overall, the fluctuating trend in Viper Energy Ut's interest coverage ratio over the analyzed period reflects varying levels of financial efficiency in servicing its debt. Investors and stakeholders should continue to monitor this ratio to assess the company's ability to meet interest payments in the future.