Frontdoor Inc (FTDR)
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 | 357,000 | 274,000 | 119,000 | 197,000 | 197,000 |
| Interest expense | US$ in thousands | 48,000 | 47,000 | 26,000 | 29,000 | 48,000 |
| Interest coverage | 7.44 | 5.83 | 4.58 | 6.79 | 4.10 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $357,000K ÷ $48,000K
= 7.44
Frontdoor Inc's interest coverage has shown variability over the years based on the data provided. The ratio indicates the company's ability to cover its interest expenses with its operating income. In December 31, 2020, the interest coverage was 4.10, which means the company generated operating income 4.1 times more than its interest expenses.
Over the subsequent years, the interest coverage ratio improved significantly. By December 31, 2021, the ratio increased to 6.79, reflecting a stronger ability to meet interest obligations. However, in December 31, 2022, the interest coverage ratio declined slightly to 4.58 before increasing again to 5.83 by December 31, 2023.
The most recent data point, December 31, 2024, shows an interest coverage ratio of 7.44, indicating that Frontdoor Inc's operating income is 7.44 times higher than its interest expenses. This trend suggests an overall improvement in the company's ability to service its debt obligations with operating income.
Overall, the fluctuation in the interest coverage ratio indicates the company's changing financial performance and its ability to manage debt obligations over the years. It is important for investors and stakeholders to monitor this ratio to assess the company's financial health and ability to meet its interest obligations.
Peer comparison
Dec 31, 2024