Hertz Global Holdings Inc (HTZ)
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 | -2,278,000 | 1,073,000 | 2,904,000 | 547,000 | -1,444,000 |
| Interest expense | US$ in thousands | 959,000 | 793,000 | 328,000 | 469,000 | 608,000 |
| Interest coverage | -2.38 | 1.35 | 8.85 | 1.17 | -2.38 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $-2,278,000K ÷ $959,000K
= -2.38
The interest coverage ratio measures a company's ability to repay its interest expenses with its operating income. A higher ratio indicates a stronger ability to cover interest payments.
For Hertz Global Holdings Inc, the interest coverage ratio has fluctuated over the years:
- In December 31, 2020, the interest coverage ratio was -2.38, indicating that the company's operating income was insufficient to cover its interest expenses, raising concerns about its financial health.
- By December 31, 2021, the interest coverage ratio improved to 1.17, but it still suggests that the company may have had difficulty meeting its interest obligations.
- The ratio significantly improved to 8.85 by December 31, 2022, signaling a much healthier financial position with ample operating income to cover interest payments comfortably.
- However, by December 31, 2023, the ratio slightly declined to 1.35, indicating a potential strain on the company's ability to cover its interest charges adequately.
- Lastly, by December 31, 2024, the interest coverage ratio reverted to -2.38, reflecting a concerning situation where the company's operating income once again fell short of covering its interest expenses.
Overall, the fluctuation in Hertz Global Holdings Inc's interest coverage ratio over the years suggests varying levels of financial strength and the need for careful monitoring of its ability to meet interest obligations in the future.
Peer comparison
Dec 31, 2024