MarineMax Inc (HZO)
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 | 183,532 | 200,622 | 217,323 | 237,896 | 254,163 | 265,169 | 257,957 | 243,578 | 224,665 | 209,469 | 198,514 | 166,266 | 123,112 | 106,731 | 86,557 | 66,639 | 67,149 | 60,532 | 64,902 | 62,758 |
| Interest expense (ttm) | US$ in thousands | 62,248 | 53,367 | 38,546 | 24,756 | 12,130 | 3,283 | 2,965 | 2,596 | 3,034 | 3,665 | 3,784 | 5,278 | 7,199 | 9,275 | 11,584 | 12,387 | 12,407 | 11,579 | 10,507 | 10,070 |
| Interest coverage | 2.95 | 3.76 | 5.64 | 9.61 | 20.95 | 80.77 | 87.00 | 93.83 | 74.05 | 57.15 | 52.46 | 31.50 | 17.10 | 11.51 | 7.47 | 5.38 | 5.41 | 5.23 | 6.18 | 6.23 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $183,532K ÷ $62,248K
= 2.95
Marinemax, Inc.'s interest coverage has shown a fluctuating trend over the past eight quarters. The interest coverage ratio measures the company's ability to meet its interest payments on outstanding debt. A higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations.
In the first quarter of 2022, the interest coverage ratio was notably high at 93.83, suggesting a strong ability to cover interest expenses. This ratio declined in the subsequent quarters but remained relatively healthy until the second quarter of 2023 when it dropped to 5.64, indicating a reduced capacity to cover interest expenses. However, the ratio rebounded in the third quarter of 2023, reaching 3.76, and further increased to 2.94 by the end of the fourth quarter of 2023.
The downward trend in the interest coverage ratio from the beginning of 2022 to the middle of 2023 may be indicative of declining profitability or increasing interest expenses relative to earnings. Investors and creditors may view the lower interest coverage ratios with concern, as it suggests a potential risk in meeting interest payments.
It is important for Marinemax, Inc. to closely monitor its interest coverage ratio to ensure it remains at a level that provides confidence to creditors and investors while also demonstrating the company's ability to manage its debt obligations effectively. Additionally, management may need to explore strategies to improve profitability or manage interest expenses to enhance the interest coverage ratio in the future.
Peer comparison
Dec 31, 2023