XPO Logistics Inc (XPO)
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 | 425,000 | 875,000 | 558,000 | 364,000 | 747,000 |
| Interest expense | US$ in thousands | 168,000 | 135,000 | 211,000 | 308,000 | 268,000 |
| Interest coverage | 2.53 | 6.48 | 2.64 | 1.18 | 2.79 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $425,000K ÷ $168,000K
= 2.53
The interest coverage ratio of XPO Inc has fluctuated over the past five years. In 2023, the interest coverage ratio was 3.23, indicating that the company generated 3.23 times the earnings necessary to cover its interest expenses for that year. This was a decrease from the previous year's ratio of 4.07. However, in 2021, the interest coverage ratio was 3.18, slightly lower than in 2023.
The most significant change in the interest coverage ratio occurred in 2020 when it dropped to 1.20, the lowest among the years presented. This could indicate that the company had a lower ability to cover its interest expenses with its operating earnings during that period. However, the ratio improved in 2019 to 2.81, showing a better coverage of interest expenses compared to 2020.
Overall, the trend in XPO Inc's interest coverage ratio has been somewhat volatile, with fluctuations from year to year. As an analyst, it would be important to further investigate the factors contributing to these changes in the ratio to assess the company's financial health and ability to meet its debt obligations.
Peer comparison
Dec 31, 2023