Hilton Grand Vacations Inc (HGV)
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 | 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 | 316,000 | 401,000 | 382,000 | 471,000 |
| Interest expense (ttm) | US$ in thousands | 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 | 43,000 | 41,000 | 36,000 | 33,000 |
| Interest coverage | 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 | 7.35 | 9.78 | 10.61 | 14.27 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $627,000K ÷ $178,000K
= 3.52
Hilton Grand Vacations Inc's interest coverage ratio has been relatively stable over the past eight quarters, ranging from a low of 3.91 in Q4 2023 to a high of 5.52 in Q3 2022. The interest coverage ratio measures the company's ability to meet its interest obligations by comparing its operating income to its interest expense.
The trend indicates that the company has generally been able to comfortably cover its interest payments with its operating income. A higher interest coverage ratio signifies a stronger ability to meet interest obligations, indicating lower financial risk.
Hilton Grand Vacations Inc's interest coverage ratios above 4.00 in all quarters suggest that the company has had a strong ability to service its debt. However, it is important to consider other factors such as the company's overall debt level and future growth prospects to get a complete picture of its financial health.