Avis Budget Group Inc (CAR)
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 | -2,273,000 | 2,210,000 | 4,336,000 | 2,255,000 | -387,000 |
| Interest expense | US$ in thousands | 358,000 | 296,000 | 250,000 | 218,000 | 231,000 |
| Interest coverage | -6.35 | 7.47 | 17.34 | 10.34 | -1.68 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $-2,273,000K ÷ $358,000K
= -6.35
The interest coverage ratio for Avis Budget Group Inc has shown significant fluctuations over the years. As of December 31, 2020, the company's interest coverage was negative at -1.68, indicating that the company's operating income was not sufficient to cover its interest expenses. However, there has been a positive turnaround in the subsequent years. By December 31, 2021, the interest coverage improved substantially to 10.34, signifying that the company's operating income was over ten times its interest expenses.
Over the following years, the interest coverage continued to strengthen, reaching 17.34 by December 31, 2022, showcasing the company's improved ability to service its debt obligations comfortably. However, there was a slight decline in interest coverage by December 31, 2023, to 7.47, suggesting a decrease in the company's ability to cover its interest payments compared to the previous year.
Furthermore, the interest coverage ratio turned negative again by December 31, 2024, at -6.35, indicating that the company's operating income was insufficient to cover its interest expenses in that particular year. Overall, it is essential for investors and creditors to monitor Avis Budget Group Inc's interest coverage closely to assess its financial health and ability to meet its debt obligations in the long term.
Peer comparison
Dec 31, 2024