Meritage Corporation (MTH)

Interest coverage

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	986,571	1,023,878	1,047,256	1,000,736	937,006	1,020,386	1,053,121	1,145,292	1,265,913	1,235,233	1,190,976	1,091,820	971,963	855,760	729,533	614,961	535,743	460,099	417,972	370,876
Interest expense (ttm)	US$ in thousands	0	0	2,462	8,257	8,516	8,598	7,474	3,200	2,982	2,972	1,713	269	318	247	223	2,251	2,177	2,196	3,209	4,301
Interest coverage		—	—	425.37	121.20	110.03	118.68	140.90	357.90	424.52	415.62	695.26	4,058.81	3,056.49	3,464.62	3,271.45	273.19	246.09	209.52	130.25	86.23

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $986,571K ÷ $0K
= —

Meritage Corporation's interest coverage ratio shows the company's ability to meet its interest obligations based on its earnings. The trend in the interest coverage ratio over the period shows fluctuations and significant changes in the company's ability to cover its interest expenses.

Starting from March 31, 2020, with an interest coverage ratio of 86.23, the company's ability to cover its interest payments improved steadily, reaching a peak of 4,058.81 on March 31, 2022. This indicates a strong ability to meet interest obligations using its operating income during this period.

However, there was a sharp decline in the interest coverage ratio in the following quarters, particularly in June 30, 2022, and September 30, 2022, dropping to 695.26 and 415.62, respectively. This sudden decline could indicate potential financial stress or a decrease in earnings relative to interest expenses.

The interest coverage ratio continued to decrease further until June 30, 2023, reaching a low of 140.90, signaling potential challenges in meeting interest obligations. The ratio further declined to 110.03 on December 31, 2023.

On a positive note, there was a slight improvement in the interest coverage ratio on March 31, 2024, indicating a better ability to cover interest expenses compared to the previous quarters.

However, it's worth noting that data for September 30, 2024, and December 31, 2024, are not provided, so the trend in the interest coverage ratio beyond March 31, 2024, remains unknown.

Overall, the fluctuating trend in Meritage Corporation's interest coverage ratio signals varying levels of financial stability and ability to meet interest obligations over the analyzed period. It is essential for the company to consistently monitor and manage its interest coverage ratio to ensure financial health and sustainability.