Callaway Golf Company (MODG)
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 | 245,000 | 239,000 | 235,200 | 252,700 | 284,700 | 263,174 | 266,874 | 230,874 | 466,074 | 486,043 | 477,840 | 209,707 | -80,634 | -68,657 | -96,539 | 113,669 | 134,441 | 120,252 | 89,415 | 122,678 |
| Interest expense (ttm) | US$ in thousands | 210,200 | 196,100 | 180,200 | 161,000 | 142,800 | 140,800 | 133,100 | 129,500 | 115,500 | 87,499 | 71,704 | 55,086 | 46,900 | 42,691 | 39,425 | 37,879 | 38,493 | 31,016 | 22,503 | 13,791 |
| Interest coverage | 1.17 | 1.22 | 1.31 | 1.57 | 1.99 | 1.87 | 2.01 | 1.78 | 4.04 | 5.55 | 6.66 | 3.81 | -1.72 | -1.61 | -2.45 | 3.00 | 3.49 | 3.88 | 3.97 | 8.90 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $245,000K ÷ $210,200K
= 1.17
The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt. A higher ratio indicates stronger financial health and a lower risk of default.
Analyzing Topgolf Callaway Brands Corp's interest coverage ratio over the past eight quarters shows a decreasing trend. The ratio has declined from 1.80 in Q4 2022 to 1.13 in Q4 2023. This indicates that the company's ability to cover its interest expenses with its earnings has weakened over time.
Despite this downward trend, the company has managed to maintain a ratio above 1.0 in all periods, indicating that it still generates enough operating income to cover its interest expenses. However, the decreasing trend suggests that the company may be experiencing increasing financial pressures or taking on more debt relative to its earnings.
It is crucial for investors and creditors to monitor Topgolf Callaway Brands Corp's interest coverage closely to ensure that the company remains capable of meeting its debt obligations and sustaining its operations in the long term.
Peer comparison
Dec 31, 2023