World Kinect Corporation (WKC)
Interest coverage
| Dec 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 211,100 | 272,500 | 272,700 | 200,100 | 201,400 | 280,200 | 299,000 | 274,100 | 260,700 | 228,400 | 176,100 | 157,400 | 146,700 | 125,400 | 198,400 | 175,600 | 210,400 | 272,500 | 246,600 | 317,100 |
| Interest expense (ttm) | US$ in thousands | 116,100 | 122,300 | 124,900 | 130,600 | 135,600 | 140,400 | 143,500 | 136,400 | 117,300 | 91,900 | 69,300 | 52,900 | 47,200 | 46,900 | 44,200 | 43,500 | 48,600 | 53,000 | 64,800 | 75,800 |
| Interest coverage | 1.82 | 2.23 | 2.18 | 1.53 | 1.49 | 2.00 | 2.08 | 2.01 | 2.22 | 2.49 | 2.54 | 2.98 | 3.11 | 2.67 | 4.49 | 4.04 | 4.33 | 5.14 | 3.81 | 4.18 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $211,100K ÷ $116,100K
= 1.82
World Kinect Corporation's interest coverage ratio has shown fluctuations over the past few years based on the provided data. The interest coverage ratio is calculated by dividing earnings before interest and taxes (EBIT) by interest expenses. A higher ratio indicates a company is more capable of meeting its interest obligations.
From March 31, 2020, to June 30, 2021, the interest coverage ratio remained relatively stable, ranging between 3.81 and 5.14. This indicated a reasonable ability to cover interest expenses with earnings during this period.
However, from September 30, 2021, to December 31, 2024, the interest coverage ratio experienced a declining trend, falling to as low as 1.49 by December 31, 2023. A declining ratio suggests that the company's ability to cover interest expenses with operating income weakened during this period.
It is important for stakeholders, such as investors and creditors, to closely monitor World Kinect Corporation's interest coverage ratio, especially in a declining trend, to assess the company's financial health and ability to meet its debt obligations. Further analysis of the company's financial performance and debt structure may be warranted to understand the reasons behind the fluctuations in the interest coverage ratio.