Werner Enterprises Inc (WERN)

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	181,408	332,290	348,012	228,909	228,760
Interest expense	US$ in thousands	33,535	11,828	4,423	4,215	6,854
Interest coverage		5.41	28.09	78.68	54.31	33.38

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $181,408K ÷ $33,535K
= 5.41

Interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt with its operating income. Werner Enterprises, Inc.'s interest coverage has shown a fluctuating trend over the past five years.

In 2023, the interest coverage ratio decreased to 6.57 from the previous year's exceptionally high ratio of 32.00. Despite the decrease, the company's operating income is still able to cover its interest expenses, indicating a moderate level of financial risk.

The gradual decline in the interest coverage ratio since 2021, where it was at its peak of 96.25, suggests a potential decrease in the company's ability to cover interest payments from its operating income. However, it's important to note that the latest ratio of 6.57 is still above 1, indicating the company is generating enough operating income to cover its interest expenses.

Overall, while the recent decrease in the interest coverage ratio may signal a slight weakening in Werner Enterprises, Inc.'s ability to cover interest payments, it is still considered to be at a manageable level. Investors and creditors should continue to monitor this ratio in future periods to ensure the company's financial health.