Williams Companies Inc (WMB)
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 | 5,420,000 | 3,621,000 | 3,207,000 | 1,462,000 | 2,371,000 |
| Interest expense | US$ in thousands | 1,236,000 | 1,147,000 | 1,179,000 | 1,172,000 | 1,186,000 |
| Interest coverage | 4.39 | 3.16 | 2.72 | 1.25 | 2.00 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $5,420,000K ÷ $1,236,000K
= 4.39
The interest coverage ratio for Williams Cos Inc has been gradually increasing over the past five years, indicating a positive trend in the company's ability to cover its interest expenses with its operating income. The ratio improved from 2.34 in 2019 to 4.10 in 2023, reflecting a stronger financial position. This suggests that the company is becoming more efficient in generating earnings to meet its interest obligations, which is a positive sign for investors and creditors. The consistent improvement in the interest coverage ratio demonstrates Williams Cos Inc's enhanced capacity to manage its debt and suggests a lower risk of default on interest payments. Overall, the trend in the interest coverage ratio highlights the company's improving financial health and its ability to meet its debt obligations in the future.
Peer comparison
Dec 31, 2023