Churchill Downs Incorporated (CHDN)
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 | 863,000 | 830,200 | 756,100 | 428,300 | 88,000 |
| Interest expense | US$ in thousands | 289,800 | 268,400 | 147,300 | 84,700 | 80,000 |
| Interest coverage | 2.98 | 3.09 | 5.13 | 5.06 | 1.10 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $863,000K ÷ $289,800K
= 2.98
The interest coverage ratio for Churchill Downs Incorporated has shown fluctuations over the years.
- As of December 31, 2020, the interest coverage ratio was 1.10, indicating that the company's ability to cover its interest expenses with operating income was weak.
- However, in the following years, there was a noticeable improvement in the interest coverage ratio. By December 31, 2021, the ratio had increased to 5.06, signifying a significant enhancement in the company's ability to meet its interest obligations.
- This positive trend continued into 2022 with an interest coverage ratio of 5.13, demonstrating continued strength in the company's ability to cover interest expenses.
- By December 31, 2023, the interest coverage ratio slightly decreased to 3.09, but still remained at a reasonable level, indicating that the company's operating income continued to comfortably cover its interest payments.
- However, by December 31, 2024, there was a further decline in the interest coverage ratio to 2.98, suggesting a slight decrease in the company's ability to cover interest expenses with operating income compared to the previous year.
Overall, while there have been fluctuations in Churchill Downs Incorporated's interest coverage ratio over the years, the company has generally shown an improvement in its ability to cover interest expenses, with some slight variations in more recent years. It is important for the company to ensure that its interest coverage remains at a healthy level to maintain financial stability and meet its debt obligations effectively.