Fox Factory Holding Corp (FOXF)
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 | 157,983 | 242,703 | 196,543 | 112,752 | 110,305 |
| Interest expense | US$ in thousands | 19,320 | 8,939 | 8,162 | 9,294 | 3,173 |
| Interest coverage | 8.18 | 27.15 | 24.08 | 12.13 | 34.76 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $157,983K ÷ $19,320K
= 8.18
The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio indicates a stronger ability to meet interest obligations.
Based on the data provided, Fox Factory Holding Corp's interest coverage ratio has fluctuated over the five-year period. In 2023, the interest coverage ratio stands at 8.18, representing a decrease from the previous year and a significant decline compared to the ratios in 2022 and 2019. This indicates that the company's ability to cover its interest expenses with operating income has weakened in 2023.
The ratio was notably high in 2022 and 2019, at 27.15 and 34.76 respectively, signaling strong financial health and a comfortable cushion to meet interest payments. In contrast, the ratios in 2020 and 2021 were lower but still at levels suggesting adequate coverage of interest expenses.
Overall, the trend in Fox Factory Holding Corp's interest coverage ratio indicates some variability in the company's ability to cover its interest obligations over the past five years. It is important for investors and stakeholders to monitor this ratio closely as it reflects the company's financial stability and ability to service its debt.
Peer comparison
Dec 31, 2023