Hertz Global Holdings Inc (HTZ)

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 347,000 2,502,000 806,000 -1,973,000 57,000
Interest expense US$ in thousands 61,000 53,000 122,000 70,000 52,000
Interest coverage 5.69 47.21 6.61 -28.19 1.10

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $347,000K ÷ $61,000K
= 5.69

Hertz Global Holdings Inc.'s interest coverage ratio has experienced fluctuations over the last three years. In 2023, the interest coverage ratio was notably low at 0.97, indicating that the company's operating income was barely sufficient to cover its interest expenses. This level raises concerns about the company's ability to meet its debt obligations using its current earnings.

However, the interest coverage ratio was substantially higher in 2022 at 6.33, signaling a significant improvement in the company's ability to cover its interest expenses with its operating income compared to 2023. This suggests a stronger financial position and a lower risk of default due to interest payment obligations.

In 2021, the interest coverage ratio was 4.34, showing a moderate decrease from the previous year but still indicating a reasonable ability to cover interest expenses comfortably with operating income.

The fluctuations in the interest coverage ratio should be closely monitored by investors and stakeholders as they suggest changes in the company's financial health and its capacity to fulfill its debt obligations. A low interest coverage ratio, as seen in 2023, may raise concerns about the company's financial sustainability and ability to service its debt effectively.


Peer comparison

Dec 31, 2023

Company name
Symbol
Interest coverage
Hertz Global Holdings Inc
HTZ
5.69
Avis Budget Group Inc
CAR
7.46
Ryder System Inc
R
3.09