XPO Logistics Inc (XPO)
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 | 660,000 | 425,000 | 875,000 | 558,000 | 364,000 |
| Interest expense | US$ in thousands | 223,000 | 168,000 | 135,000 | 211,000 | 308,000 |
| Interest coverage | 2.96 | 2.53 | 6.48 | 2.64 | 1.18 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $660,000K ÷ $223,000K
= 2.96
Interest coverage ratio is a financial metric that indicates a company's ability to cover its interest obligations with its operating income.
Analyzing the interest coverage ratios of XPO Logistics Inc over the past five years reveals fluctuations in the company's ability to meet its interest payments. In December 31, 2020, the interest coverage ratio was relatively low at 1.18, indicating that the company's operating income was only sufficient to cover its interest expenses slightly over one time. However, there was a significant improvement in December 31, 2021, with the ratio increasing to 2.64, showing a better ability to cover interest payments.
The trend continued to improve in December 31, 2022, where the interest coverage ratio reached 6.48, indicating a substantial increase in the company's ability to meet its interest obligations comfortably. However, in December 31, 2023, there was a slight decline in the interest coverage ratio to 2.53, although it still remained above the previous years' levels.
By December 31, 2024, the interest coverage ratio improved to 2.96, suggesting that XPO Logistics Inc continued to strengthen its ability to cover interest expenses with its operating income. Overall, the company's interest coverage ratios show a mix of fluctuations and improvements over the years, signaling varying levels of financial health and ability to meet interest obligations.
Peer comparison
Dec 31, 2024