Polaris Industries Inc (PII)
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 | 282,300 | 390,800 | 532,300 | 606,300 | 726,300 | 828,200 | 868,300 | 868,600 | 802,300 | 692,400 | 593,300 | 614,800 | 706,700 | 823,200 | 840,800 | 706,000 | 523,900 | 336,617 | 291,710 | 343,648 |
| Interest expense (ttm) | US$ in thousands | 137,000 | 136,900 | 133,200 | 130,000 | 126,400 | 117,100 | 104,700 | 88,200 | 71,700 | 58,000 | 48,700 | 44,500 | 44,200 | 48,300 | 54,800 | 62,000 | 66,700 | 68,217 | 70,650 | 73,370 |
| Interest coverage | 2.06 | 2.85 | 4.00 | 4.66 | 5.75 | 7.07 | 8.29 | 9.85 | 11.19 | 11.94 | 12.18 | 13.82 | 15.99 | 17.04 | 15.34 | 11.39 | 7.85 | 4.93 | 4.13 | 4.68 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $282,300K ÷ $137,000K
= 2.06
The interest coverage ratio of Polaris Industries Inc has shown fluctuations over the last few years, indicating the company's ability to meet its interest obligations from operating profits.
From March 31, 2020, to December 31, 2021, the interest coverage ratio steadily increased from 4.68 to 15.99, which suggests an improvement in the company's ability to cover its interest expenses. This positive trend indicates that Polaris was generating sufficient operating income to comfortably cover its interest payments during this period.
However, from March 31, 2022, to December 31, 2024, the interest coverage ratio declined gradually from 13.82 to 2.06. This downward trend could be a cause for concern as it indicates a potential decrease in the company's ability to cover its interest expenses with its operating income. A lower interest coverage ratio may signal increased financial risk for the company, as it may struggle to meet its interest obligations in the future.
Overall, while Polaris Industries Inc has shown fluctuations in its interest coverage ratio over the years, investors and stakeholders should closely monitor this ratio to assess the company's financial health and its ability to manage its debt effectively.