Vail Resorts Inc (MTN)
Interest coverage
| Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 491,060 | 509,584 | 584,930 | 279,975 | 212,932 |
| Interest expense | US$ in thousands | 161,839 | 153,022 | 148,183 | 151,399 | 106,721 |
| Interest coverage | 3.03 | 3.33 | 3.95 | 1.85 | 2.00 |
July 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $491,060K ÷ $161,839K
= 3.03
The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt. A higher interest coverage ratio indicates that a company is more capable of servicing its debt obligations. Vail Resorts Inc's interest coverage has shown fluctuations over the past five years, ranging from 1.85 to 3.95.
In 2022, the interest coverage ratio was at its highest at 3.95, indicating that the company's earnings were nearly four times its interest expenses, reflecting a strong ability to cover its interest payments comfortably. However, in 2021, the ratio dropped to 1.85, which suggests a lower ability to cover interest expenses with operating income alone.
Over the five-year period, the interest coverage ratio has been relatively stable, demonstrating Vail Resorts Inc's consistent ability to generate sufficient earnings to cover its interest obligations. It is important to monitor interest coverage over time to ensure the company's financial health and ability to meet its debt obligations.
Peer comparison
Jul 31, 2024