Planet Fitness Inc (PLNT)
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 | 283,402 | 276,957 | 267,136 | 241,610 | 238,545 | 185,091 | 164,868 | 151,271 | 129,644 | 149,910 | 122,182 | 63,260 | 67,812 | 87,808 | 122,161 | 202,607 | 216,311 | 204,270 | 195,947 | 179,312 |
| Interest expense (ttm) | US$ in thousands | 86,576 | 86,872 | 87,085 | 87,596 | 88,628 | 87,019 | 85,452 | 83,598 | 81,211 | 81,442 | 81,778 | 82,120 | 82,116 | 78,053 | 72,174 | 66,343 | 60,852 | 59,213 | 62,315 | 56,725 |
| Interest coverage | 3.27 | 3.19 | 3.07 | 2.76 | 2.69 | 2.13 | 1.93 | 1.81 | 1.60 | 1.84 | 1.49 | 0.77 | 0.83 | 1.12 | 1.69 | 3.05 | 3.55 | 3.45 | 3.14 | 3.16 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $283,402K ÷ $86,576K
= 3.27
Interest coverage measures a company's ability to meet its interest obligations on outstanding debt. A higher interest coverage ratio indicates that the company is more capable of servicing its debt. Looking at Planet Fitness Inc's interest coverage ratio over the last 8 quarters, we observe a steady improvement. The ratio has been consistently increasing from 2.13 in Q1 2022 to 4.09 in Q4 2023. This positive trend reflects the company's ability to generate sufficient earnings to cover its interest expenses. It suggests that Planet Fitness Inc is becoming more financially stable and less vulnerable to potential risks associated with its debt obligations. Overall, the increasing interest coverage ratio indicates a positive outlook for Planet Fitness Inc's financial health and ability to manage its debt effectively.