Williams Companies Inc (WMB)
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 | 3,339,000 | 5,420,000 | 3,621,000 | 3,207,000 | 1,462,000 |
| Interest expense | US$ in thousands | 68,000 | 1,236,000 | 1,147,000 | 1,179,000 | 1,172,000 |
| Interest coverage | 49.10 | 4.39 | 3.16 | 2.72 | 1.25 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $3,339,000K ÷ $68,000K
= 49.10
The interest coverage ratio of Williams Companies Inc has shown a positive trend over the years based on the provided data. In December 31, 2020, the interest coverage ratio was 1.25, indicating that the company had just enough operating income to cover its interest expenses. However, this ratio improved significantly to 2.72 by December 31, 2021, suggesting a better ability to meet interest obligations.
Subsequently, the interest coverage ratio continued to strengthen, reaching 3.16 by December 31, 2022, and further improving to 4.39 by December 31, 2023. This consistent growth in the interest coverage ratio signifies that the company's earnings before interest and taxes (EBIT) have been more than sufficient to cover its interest payments, indicating a lower risk of default on its debt obligations.
By December 31, 2024, the interest coverage ratio surged to an impressive 49.10, indicating a significant increase in the company's ability to service its debt. This substantial improvement suggests a robust financial position for Williams Companies Inc, with a strong capacity to cover its interest expenses multiple times over. Overall, the trend in Williams Companies Inc's interest coverage ratio reflects a positive financial performance and a reduced risk of financial distress related to debt obligations.
Peer comparison
Dec 31, 2024