Xcel Energy Inc (XEL)
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 | 2,789,000 | 2,629,000 | 2,459,000 | 2,205,000 | 2,108,000 |
| Interest expense | US$ in thousands | 1,182,000 | 1,004,000 | 893,000 | 816,000 | 798,000 |
| Interest coverage | 2.36 | 2.62 | 2.75 | 2.70 | 2.64 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $2,789,000K ÷ $1,182,000K
= 2.36
The interest coverage ratio for Xcel Energy Inc has been relatively stable over the past five years, ranging from 2.36 to 2.75. This indicates that the company is capable of covering its interest expenses with its operating income. Generally, a higher interest coverage ratio suggests that the company is in a better position to meet its interest obligations, signaling financial stability and lower default risk.
Xcel Energy Inc's interest coverage ratios have consistently been above 2, indicating a healthy ability to pay interest on its outstanding debt. However, the slight decrease in the interest coverage ratio from 2022 to 2024 may warrant further monitoring to ensure that the company's operating income continues to sufficiently cover its interest expenses. Overall, the stability and consistency of Xcel Energy Inc's interest coverage ratios demonstrate a sound financial position in terms of meeting its debt obligations.
Peer comparison
Dec 31, 2024