Polaris Industries Inc (PII)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 745,500 | 676,800 | 670,200 | 281,500 | 485,500 |
| Interest expense | US$ in thousands | 125,000 | 71,700 | 44,200 | 66,800 | 77,600 |
| Interest coverage | 5.96 | 9.44 | 15.16 | 4.21 | 6.26 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $745,500K ÷ $125,000K
= 5.96
Polaris Inc's interest coverage has exhibited fluctuations over the past five years. The interest coverage ratio measures the company's ability to meet its interest obligations with its operating income. A higher interest coverage ratio indicates a stronger ability to cover interest expenses.
In 2023, Polaris Inc's interest coverage ratio decreased to 5.61 from 11.22 in 2022, which signals a decline in its ability to cover interest payments. Despite this decrease, the ratio remains above 1, indicating that the company is still generating enough operating income to cover its interest expenses.
The company's interest coverage ratio was at its highest in 2021 at 16.04, demonstrating a robust ability to meet interest obligations. The subsequent decrease in 2022 and 2023 suggests a potential increase in interest expenses or a decrease in operating income.
Overall, Polaris Inc's interest coverage has shown variability over the years, with fluctuations possibly indicating changes in the company's financial health and performance. Further analysis of the company's financial statements and business operations would be required to fully understand the factors influencing these fluctuations in interest coverage.