TripAdvisor Inc (TRIP)
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 | 134,000 | 166,000 | 169,000 | 175,000 | 176,000 | 127,000 | 118,000 | 127,000 | 110,000 | 80,000 | 23,000 | -76,000 | -140,000 | -194,000 | -255,000 | -392,000 | -332,000 | -221,000 | -100,000 | 142,000 |
| Interest expense (ttm) | US$ in thousands | 46,000 | 46,000 | 44,000 | 44,000 | 44,000 | 43,000 | 43,000 | 43,000 | 44,000 | 45,000 | 46,000 | 46,000 | 45,000 | 48,000 | 49,000 | 45,000 | 36,000 | 24,000 | 13,000 | 8,000 |
| Interest coverage | 2.91 | 3.61 | 3.84 | 3.98 | 4.00 | 2.95 | 2.74 | 2.95 | 2.50 | 1.78 | 0.50 | -1.65 | -3.11 | -4.04 | -5.20 | -8.71 | -9.22 | -9.21 | -7.69 | 17.75 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $134,000K ÷ $46,000K
= 2.91
The interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt. A higher ratio indicates that a company is more capable of covering its interest expenses with its operating income.
Analyzing the interest coverage ratio of TripAdvisor Inc based on the provided data, there have been fluctuations over the years. As of March 31, 2020, the interest coverage ratio was a healthy 17.75, indicating that TripAdvisor had a strong ability to cover its interest payments. However, starting from June 30, 2020, the ratio turned negative, indicating that the company's operating income was not enough to cover its interest expenses.
The negative trend continued until June 30, 2022, reaching a low of -5.20. This suggests that TripAdvisor was facing challenges in meeting its financial obligations from operating income alone during this period. However, there was a notable improvement from June 30, 2022, onwards, with the interest coverage ratio gradually recovering into positive territory.
By December 31, 2024, the interest coverage ratio had improved to 2.91. While still below the ideal ratio of 3 or higher, this upward trend indicates that TripAdvisor's ability to cover its interest payments had improved over the analyzed period. It would be important for investors and analysts to monitor this ratio in the future to ensure the company's financial health and ability to service its debt obligations.
Peer comparison
Dec 31, 2024