American Water Works Co (American Water Works Co) Interest Coverage

: 2.53 (As of Dec. 2023)

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Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income by its Interest Expense. American Water Works Co's Operating Income for the three months ended in Dec. 2023 was $299 Mil. American Water Works Co's Interest Expense for the three months ended in Dec. 2023 was $-118 Mil. American Water Works Co's interest coverage for the quarter that ended in Dec. 2023 was 2.53. The higher the ratio, the stronger the company's financial strength is.

The historical rank and industry rank for American Water Works Co's Interest Coverage or its related term are showing as below:

AWK' s Interest Coverage Range Over the Past 10 Years
Min: 2.94 Med: 3.25 Max: 3.62
Current: 3.27

AWK's Interest Coverage is ranked worse than
55.23% of 440 companies
in the Utilities - Regulated industry
Industry Median: 3.69 vs AWK: 3.27

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

American Water Works Co Interest Coverage Historical Data

The historical data trend for American Water Works Co's Interest Coverage can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.

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American Water Works Co Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Interest Coverage

3.15

3.14

2.97

2.94

3.27

American Water Works Co Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Interest Coverage																2.25	2.57	3.93	4.09	2.53

Competitive Comparison

For the Utilities - Regulated Water subindustry, American Water Works Co's Interest Coverage, along with its competitors' market caps and Interest Coverage data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

American Water Works Co Interest Coverage Distribution

For the Utilities - Regulated industry and Utilities sector, American Water Works Co's Interest Coverage distribution charts can be found below:

* The bar in red indicates where American Water Works Co's Interest Coverage falls into.

American Water Works Co Interest Coverage Calculation

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

If Interest Expense is negative and Operating Income is positive, then

Interest Coverage

-1

Operating Income

Interest Expense

Else if Interest Expense is negative and Operating Income is negative, then

The company did not have earnings to cover the interest expense.

Else if Interest Expense is 0 and Long-Term Debt & Capital Lease Obligation is 0, then

The company had no debt ⁽¹⁾.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

American Water Works Co's Interest Coverage for the fiscal year that ended in Dec. 2023 is calculated as

Here, for the fiscal year that ended in Dec. 2023, American Water Works Co's Interest Expense was $-460 Mil. Its Operating Income was $1,504 Mil. And its Long-Term Debt & Capital Lease Obligation was $11,788 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Dec. 2023 )	/	Interest Expense (A: Dec. 2023 )
	=	-1	*	1504	/	-460
	=	3.27

American Water Works Co's Interest Coverage for the quarter that ended in Dec. 2023 is calculated as

Here, for the three months ended in Dec. 2023, American Water Works Co's Interest Expense was $-118 Mil. Its Operating Income was $299 Mil. And its Long-Term Debt & Capital Lease Obligation was $11,788 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Dec. 2023 )	/	Interest Expense (Q: Dec. 2023 )
	=	-1	*	299	/	-118
	=	2.53

The higher the ratio, the stronger the company's Financial Strength is.

American Water Works Co (NYSE:AWK) Interest Coverage Explanation

Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.

Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .

American Water Works Co Interest Coverage Related Terms

Thank you for viewing the detailed overview of American Water Works Co's Interest Coverage provided by GuruFocus.com. Please click on the following links to see related term pages.

American Water Works Co (American Water Works Co) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Utilities » Utilities - Regulated » American Water Works Co Inc (NYSE:AWK) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

1AWK:Italy AWC:Germany AWC:Germany AWC:Germany A1WK34:Brazil

Address

1 Water Street, Camden, NJ, USA, 08102-1658

Website

https://www.amwater.com

American Water Works is the largest investor-owned U.S. water and wastewater utility, serving approximately 3.5 million customers in 16 states. It provides water and wastewater services to residential, commercial, and industrial customers and operates predominantly in regulated markets. The company's nonregulated business is water services for military bases, which operates under long-term contracts with regulated-like returns.

Executives

Michael Marberry	director	3050 SPRUCE STREET, ST. LOUIS MO 63103
Martha Clark Goss	director	C/O OCWEN FINANCIAL CORPORATION, 1661 WORTHINGTON RD, SUITE 100, WEST PALM BEACH FL 33409
Laurie P. Havanec	director	ONE CARRIER PLACE, FARMINGTON CT 06032
Melanie M Kennedy	officer: SVP, Human Resources	1 WATER STREET, CAMDEN NJ 08102-1658
John C. Griffith	officer: EVP Chief Financial Officer	1 WATER STREET, CAMDEN NJ 08102-1658
James H Gallegos	officer: EVP and General Counsel	1 WATER STREET, CAMDEN NJ 08102-1658
Cheryl Norton	officer: SVP,Chief Envrn Off & East Div	1 WATER STREET, CAMDEN NJ 08102-1658
Melissa K. Wikle	officer: Vice President and Controller	1 WATER STREET, CAMDEN NJ 08102-1658
Walter Lynch	officer: Executive VP, Eastern Division	1 WATER STREET, CAMDEN NJ 08102-1658
Maureen Duffy	officer: VP,Corp.Comm.&External Affairs	1 WATER STREET, CAMDEN NJ 08102-1658
Adam W. Noble	officer: Chief Tech. & Innov. Officer	1 WATER STREET, CAMDEN NJ 08102-1658
Lloyd M Yates	director	1N 2ND ST, HARTSVILLE SC 29550
Bruce A Hauk	officer: Pres, Reg. Ops & Military Serv	110 W. TAYLOR STREET, SAN JOSE CA 95110
Kevin B Kirwan	officer: SVP, Chief Op Excel&Safety Off	1 WATER STREET, CAMDEN NJ 08102-1658
Michael A Sgro	officer: Interim General Counsel	1 WATER STREET, CAMDEN NJ 08102-1658