Verra Mobility Corp (VRRM)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 153,010 | 174,458 | 197,525 | 112,583 | 41,718 |
| Interest expense | US$ in thousands | 73,902 | 86,701 | 69,372 | 44,942 | 40,865 |
| Interest coverage | 2.07 | 2.01 | 2.85 | 2.51 | 1.02 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $153,010K ÷ $73,902K
= 2.07
The interest coverage ratio for Verra Mobility Corp has shown a varying trend over the past five years. In December 2020, the interest coverage ratio was at a concerning level of 1.02, indicating that the company's operating income was just enough to cover its interest expenses. However, there has been a noticeable improvement in subsequent years.
By December 2021, the interest coverage ratio had increased to a healthier level of 2.51, demonstrating an improvement in the company's ability to cover its interest obligations with operating income. The positive trend continued into December 2022 and December 2023, with the interest coverage ratios reaching 2.85 and 2.01, respectively.
Although there was a slight dip in the interest coverage ratio in December 2024 to 2.07, the overall trend indicates a strengthening ability of Verra Mobility Corp to meet its interest obligations through its operating income. It is essential for stakeholders to continue monitoring this ratio to ensure the company's financial health and ability to service its debt.
Peer comparison
Dec 31, 2024