Wabash National Corporation (WNC)
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 | -355,919 | -294,910 | 216,048 | 274,600 | 315,189 | 308,895 | 284,133 | 216,729 | 166,918 | 81,710 | 47,098 | 29,767 | 21,130 | 66,293 | 56,469 | 42,201 | -79,574 | -59,739 | -28,576 | 15,734 |
| Interest expense (ttm) | US$ in thousands | 19,839 | 19,835 | 19,809 | 19,848 | 19,854 | 20,097 | 20,375 | 20,606 | 20,525 | 20,438 | 21,075 | 21,891 | 23,128 | 24,322 | 24,224 | 24,072 | 24,194 | 24,420 | 25,384 | 26,522 |
| Interest coverage | -17.94 | -14.87 | 10.91 | 13.84 | 15.88 | 15.37 | 13.95 | 10.52 | 8.13 | 4.00 | 2.23 | 1.36 | 0.91 | 2.73 | 2.33 | 1.75 | -3.29 | -2.45 | -1.13 | 0.59 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-355,919K ÷ $19,839K
= -17.94
The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher ratio indicates a stronger ability to meet interest obligations.
Analyzing Wabash National Corporation's interest coverage ratios over the past few years reveals fluctuations in its ability to cover interest expenses. The ratios were negative in the first few quarters of the data provided, suggesting that the company's operating income was insufficient to cover its interest payments during those periods. This indicates a potential financial risk as negative ratios imply that the company may have difficulty meeting its interest obligations with its current earnings.
However, the interest coverage ratios began to improve from March 31, 2021, onwards, reaching positive values. This improvement suggests that Wabash National Corporation's operating income has been increasing sufficiently to cover its interest expenses more comfortably. The trend of increasing interest coverage ratios from 2021 to 2024 indicates a positive development in the company's financial health.
Of note is the significant improvement in the interest coverage ratio from September 30, 2022, onwards, with the ratio exceeding 10 in the following quarters. This substantial increase indicates a robust ability to cover interest expenses, potentially reflecting an enhancement in the company's profitability and financial stability.
However, it is worth mentioning the sudden decline in the interest coverage ratio to negative values in the last few quarters of the data provided (September 30, 2024, and December 31, 2024). This sharp decrease raises concerns about the company's ability to meet its interest obligations with its operating income during those periods.
In conclusion, while there have been fluctuations, Wabash National Corporation's interest coverage ratios have shown an overall improvement from negative values to positive values, indicating a strengthening ability to cover interest expenses. Nevertheless, the recent decline in the ratio warrants further monitoring to assess its impact on the company's financial performance and solvency.