Churchill Downs Incorporated (CHDN)
Interest coverage
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 830,200 | 739,300 | 699,200 | 949,800 | 756,100 | 779,800 | 779,600 | 436,500 | 428,300 | 391,100 | 358,500 | 80,200 | -7,200 | -18,700 | -53,800 | 217,700 | 265,200 | 260,100 | 301,300 | 281,800 |
| Interest expense (ttm) | US$ in thousands | 268,400 | 252,500 | 220,800 | 190,700 | 147,300 | 114,200 | 99,700 | 86,600 | 84,700 | 83,800 | 81,800 | 80,100 | 80,000 | 78,200 | 77,400 | 76,500 | 70,900 | 62,900 | 53,900 | 44,200 |
| Interest coverage | 3.09 | 2.93 | 3.17 | 4.98 | 5.13 | 6.83 | 7.82 | 5.04 | 5.06 | 4.67 | 4.38 | 1.00 | -0.09 | -0.24 | -0.70 | 2.85 | 3.74 | 4.14 | 5.59 | 6.38 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $830,200K ÷ $268,400K
= 3.09
Churchill Downs, Inc.'s interest coverage ratio has shown a declining trend over the past 8 quarters, from a high of 5.41 in Q1 2022 to a low of 2.76 in Q4 2023. This indicates that the company's ability to cover its interest expenses with its operating income has weakened over time.
A high interest coverage ratio is generally seen as favorable, as it suggests that the company is generating enough operating income to comfortably meet its interest obligations. Conversely, a declining trend in the interest coverage ratio may raise concerns about the company's ability to service its debt in the long term.
It is important to note that a single ratio on its own may not provide a complete picture of the company's financial health. It is advisable to consider other financial ratios and factors alongside the interest coverage ratio to assess Churchill Downs, Inc.'s overall financial performance and stability.