Travel + Leisure Co (TNL)
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 | 741,000 | 682,000 | 622,000 | -86,000 | 860,000 |
| Interest expense | US$ in thousands | 251,000 | 195,000 | 198,000 | 192,000 | 162,000 |
| Interest coverage | 2.95 | 3.50 | 3.14 | -0.45 | 5.31 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $741,000K ÷ $251,000K
= 2.95
Travel+Leisure Co's interest coverage ratio has shown fluctuations over the past five years. In 2023, the interest coverage ratio was 3.14, indicating that the company generated operating income 3.14 times more than its interest expenses for the year. This was a decrease from 2022 when the ratio was 3.59. Compared to 2021, where the ratio was 3.16, the interest coverage decreased slightly. Notably, in 2020, the interest coverage ratio was significantly lower at 0.40, indicating that the company's operating income barely covered its interest expenses during that period. However, in 2019, the interest coverage ratio was relatively high at 5.32, suggesting strong ability to meet interest obligations.
Overall, the trend in Travel+Leisure Co's interest coverage ratio fluctuated with the ratio improving after 2020. While the company has shown an ability to cover its interest expenses in recent years, the decreasing trend from 2022 to 2023 warrants closer monitoring to ensure sustainable financial health and debt servicing capability.
Peer comparison
Dec 31, 2023