Travel + Leisure Co (TNL)
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 | 779,000 | 768,000 | 791,000 | 754,000 | 742,000 | 719,000 | 717,000 | 705,000 | 682,000 | 708,000 | 685,000 | 656,000 | 623,000 | 512,000 | 396,000 | 139,000 | -86,000 | 105,000 | 255,000 | 570,000 |
| Interest expense (ttm) | US$ in thousands | 251,000 | 259,000 | 259,000 | 257,000 | 251,000 | 235,000 | 219,000 | 205,000 | 194,000 | 193,000 | 192,000 | 192,000 | 198,000 | 201,000 | 206,000 | 205,000 | 193,000 | 179,000 | 167,000 | 161,000 |
| Interest coverage | 3.10 | 2.97 | 3.05 | 2.93 | 2.96 | 3.06 | 3.27 | 3.44 | 3.52 | 3.67 | 3.57 | 3.42 | 3.15 | 2.55 | 1.92 | 0.68 | -0.45 | 0.59 | 1.53 | 3.54 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $779,000K ÷ $251,000K
= 3.10
The interest coverage ratio of Travel + Leisure Co has shown a fluctuating trend over the period analyzed. The ratio stood at 3.54 on March 31, 2020, indicating that the company's operating income was sufficient to cover its interest expenses 3.54 times over. However, there was a significant decline in the ratio to 0.59 on September 30, 2020, and even turned negative (-0.45) on December 31, 2020, suggesting that the company was not generating enough operating income to cover its interest payments.
Subsequently, the interest coverage ratio improved, reaching 3.67 on September 30, 2022, indicating a healthier position in terms of covering interest expenses. The ratio remained relatively stable around the 3.0 mark from March 31, 2023, to December 31, 2024, showing that the company's operating income was consistently able to cover its interest obligations.
Overall, the fluctuation and volatility in the interest coverage ratio indicate varying levels of financial risk and operational performance for Travel + Leisure Co during the period under review. It is important for stakeholders to monitor this ratio regularly to assess the company's ability to meet its interest payments with operating income.
Peer comparison
Dec 31, 2024