National Vision Holdings Inc (EYE)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | -46,826 | 61,275 | 174,937 | 87,007 | 73,575 |
| Interest expense | US$ in thousands | 1,675 | 2,342 | 2,923 | 51,983 | 39,162 |
| Interest coverage | -27.96 | 26.16 | 59.85 | 1.67 | 1.88 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $-46,826K ÷ $1,675K
= -27.96
National Vision Holdings Inc's interest coverage ratio has shown significant fluctuations over the past five years. In 2023, the company's interest coverage ratio was negative, indicating that its earnings were insufficient to cover its interest expenses. This marked decline from the previous year's ratio of 26.16 raises concerns about the company's ability to meet its interest obligations.
The substantial drop in the interest coverage ratio from 2022 to 2023 suggests a significant deterioration in the company's financial health and profitability. Moreover, the negative interest coverage ratio in 2023 indicates a heightened risk of default on debt payments.
In contrast, the interest coverage ratios for 2021, 2020, and 2019 were more favorable, ranging from 1.67 to 59.85. While the ratio in 2020 and 2019 was close to 1.88, indicating that the company generated just enough earnings to cover its interest expenses, the ratio in 2021 was significantly higher, reflecting a healthier financial position during that period.
Overall, National Vision Holdings Inc's interest coverage ratio has been volatile, with the company experiencing both strong and weak performances in different years. It is crucial for investors and stakeholders to closely monitor the company's financial stability and ability to generate sufficient earnings to service its debt obligations in the future.
Peer comparison
Dec 31, 2023