National Vision Holdings Inc (EYE)
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 | -46,826 | -43,347 | 46,609 | 57,255 | 61,275 | 79,011 | 114,363 | 150,821 | 174,937 | 223,884 | 227,967 | 131,540 | 87,007 | 38,472 | -5,210 | 58,090 | 73,575 | 45,827 | 32,632 | 35,903 |
| Interest expense (ttm) | US$ in thousands | 6,093 | 6,220 | 6,391 | 6,562 | 2,342 | 2,514 | 2,658 | 2,790 | 8,473 | 21,654 | 34,239 | 49,985 | 51,110 | 47,816 | 44,291 | 37,666 | 39,272 | 37,840 | 37,471 | 37,031 |
| Interest coverage | -7.69 | -6.97 | 7.29 | 8.73 | 26.16 | 31.43 | 43.03 | 54.06 | 20.65 | 10.34 | 6.66 | 2.63 | 1.70 | 0.80 | -0.12 | 1.54 | 1.87 | 1.21 | 0.87 | 0.97 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-46,826K ÷ $6,093K
= -7.69
The interest coverage ratio is a measure of a company's ability to pay its interest expenses on outstanding debt. A higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations.
Looking at the historical trend of National Vision Holdings Inc's interest coverage ratio, we can see significant fluctuations over the past few years. The interest coverage ratio was positive and healthy in the earlier periods, indicating that the company had sufficient earnings to cover its interest expenses. However, in more recent periods, the interest coverage ratio has turned negative, suggesting that the company's earnings are insufficient to cover its interest payments.
This negative trend in the interest coverage ratio raises concerns about the company's ability to service its debt in the short term. The declining interest coverage ratio may indicate financial distress or a need to reevaluate the company's debt levels and overall financial strategy.
It is crucial for National Vision Holdings Inc to closely monitor and manage its interest coverage ratio to ensure it can meet its debt obligations and maintain financial stability. Additional measures such as improving profitability, reducing debt levels, or refinancing debt at lower interest rates may be necessary to strengthen the company's financial position and improve its interest coverage ratio in the future.
Peer comparison
Dec 31, 2023