Hilton Grand Vacations Inc (HGV)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 216,000 | 329,000 | 387,000 | 557,000 | 627,000 | 603,000 | 663,000 | 653,000 | 623,000 | 647,366 | 596,071 | 476,071 | 374,071 | 10,705 | -180,847 | -237,847 | -220,847 | 73,153 | 157,000 | 250,000 |
| Interest expense (ttm) | US$ in thousands | 93,000 | 141,000 | 153,000 | 213,000 | 178,000 | 170,000 | 162,000 | 153,000 | 142,000 | 136,000 | 141,000 | 123,000 | 105,000 | 85,000 | 53,000 | 48,000 | 43,000 | 42,000 | 44,000 | 43,000 |
| Interest coverage | 2.32 | 2.33 | 2.53 | 2.62 | 3.52 | 3.55 | 4.09 | 4.27 | 4.39 | 4.76 | 4.23 | 3.87 | 3.56 | 0.13 | -3.41 | -4.96 | -5.14 | 1.74 | 3.57 | 5.81 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $216,000K ÷ $93,000K
= 2.32
The interest coverage ratio of Hilton Grand Vacations Inc has shown fluctuations over the analyzed period. It started at a relatively healthy level of 5.81 in March 2020, indicating that the company's operating income was 5.81 times higher than its interest expenses. However, there was a noticeable decline by September 2021, reaching a concerning level of 0.13, suggesting that the company's ability to cover its interest payments had become strained.
Subsequently, there was a gradual improvement in the interest coverage ratio, reaching 4.76 by September 2022, reflecting a stronger capacity to meet interest obligations. From that point on, the ratio remained relatively stable, hovering around the 4.00 mark, signaling a sustained improvement in the company's ability to handle its interest expenses.
Overall, the increasing trend in the interest coverage ratio from September 2021 to December 2024 indicates a positive trajectory in Hilton Grand Vacations Inc's financial health and ability to manage its debt obligations efficiently.