Werner Enterprises Inc (WERN)

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	81,694	181,316	336,614	250,218	216,167
Interest expense	US$ in thousands	39,212	33,535	11,828	4,423	4,215
Interest coverage		2.08	5.41	28.46	56.57	51.29

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $81,694K ÷ $39,212K
= 2.08

The interest coverage of Werner Enterprises Inc has shown a generally favorable trend over the past few years. As of December 31, 2020, the interest coverage ratio stood at a robust 51.29, indicating the company's ability to comfortably meet its interest obligations. This ratio further improved to 56.57 by December 31, 2021, reflecting continued financial strength.

However, there was a noticeable decline in the interest coverage ratio by December 31, 2022, dropping to 28.46. This decline may signal a slight weakening in the company's ability to cover its interest payments from its operating income. The trend continued downward significantly as of December 31, 2023, with the interest coverage ratio falling to 5.41, raising concerns about the company's financial health and ability to service its debt obligations.

By December 31, 2024, the interest coverage ratio plummeted further to 2.08, indicating a critical situation where the company's operating income may not be sufficient to cover its interest expenses, potentially leading to financial distress.

Overall, while Werner Enterprises Inc demonstrated strong interest coverage ratios in the past, the recent decline signals a deteriorating financial situation that requires careful monitoring and strategic actions to improve the company's ability to meet its interest payment obligations.