Callaway Golf Company (MODG)
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 | -1,257,200 | 245,000 | 284,700 | 466,200 | -80,600 |
| Interest expense | US$ in thousands | 231,200 | 210,200 | 142,800 | 115,600 | 46,900 |
| Interest coverage | -5.44 | 1.17 | 1.99 | 4.03 | -1.72 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $-1,257,200K ÷ $231,200K
= -5.44
The interest coverage ratio for Callaway Golf Company has fluctuated significantly over the years based on the provided data.
- As of December 31, 2020, the interest coverage was -1.72, indicating that the company's operating income was not sufficient to cover its interest expenses, potentially signaling financial distress.
- By December 31, 2021, the interest coverage improved to 4.03, showing that the company's operating income was more than enough to cover its interest obligations, reflecting a healthier financial position.
- However, in the subsequent years, the interest coverage ratio declined, reaching 1.17 as of December 31, 2023, suggesting that the company's ability to meet its interest payments was weakening.
- The data also reveals a significant negative interest coverage of -5.44 as of December 31, 2024, which indicates a concerning situation where the company's operating income was insufficient to cover its interest expenses multiple times over.
Overall, the trend in Callaway Golf Company's interest coverage ratio raises concerns about its financial stability and ability to meet its debt obligations, highlighting the importance of monitoring the company's financial performance closely in the future.
Peer comparison
Dec 31, 2024