Verra Mobility Corp (VRRM)

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	173,698	196,480	112,843	41,718	91,386
Interest expense	US$ in thousands	86,701	69,372	44,942	40,865	60,729
Interest coverage		2.00	2.83	2.51	1.02	1.50

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $173,698K ÷ $86,701K
= 2.00

The interest coverage ratio for Verra Mobility Corp has shown some fluctuations over the past five years. In 2023, the interest coverage ratio was 2.18, indicating that the company generated sufficient operating income to cover its interest expenses 2.18 times. This was a slight decrease from 2022 when the ratio was 2.37.

In 2021, the interest coverage ratio further declined to 2.49, but it was still at a relatively healthy level. However, in 2020, the ratio dropped significantly to 0.93, suggesting that the company's operating income was barely enough to cover its interest expenses. The situation improved in 2019 with an interest coverage ratio of 1.69, but it was still lower compared to the previous years.

Overall, Verra Mobility Corp's interest coverage has been somewhat volatile, with fluctuations in the ability to cover interest expenses from year to year. It is essential for the company to monitor this ratio closely to ensure it maintains a comfortable buffer to handle its interest obligations effectively.