Under Armour Inc C (UA)

Interest coverage

		Mar 31, 2024	Mar 31, 2023	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	229,751	283,811	486,290	-613,438	236,770
Interest expense	US$ in thousands	28,800	5,292	18,091	17,270	4,254
Interest coverage		7.98	53.63	26.88	-35.52	55.66

March 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $229,751K ÷ $28,800K
= 7.98

The interest coverage ratio measures a company's ability to pay interest expenses on its debt. A higher ratio indicates a company is more capable of meeting its interest obligations.

Under Armour Inc C's interest coverage has fluctuated over the past five years. As of March 31, 2024, the interest coverage ratio was 7.98, suggesting the company had sufficient earnings to cover its interest expenses.

In comparison, the interest coverage ratio was remarkably higher at 53.63 as of March 31, 2023, indicating a strong ability to cover interest costs that year.

During the years ending December 31, 2021 and 2019, the company also demonstrated solid interest coverage ratios of 26.88 and 55.66, respectively, further supporting its ability to manage interest payments.

However, the financial performance of Under Armour Inc C was concerning as of December 31, 2020, with a negative interest coverage ratio of -35.52. This negative ratio indicates that the company's earnings were insufficient to cover its interest expenses, which could be a red flag for potential financial distress.

Overall, while the company has shown strong interest coverage ratios in recent years, investors and stakeholders should remain vigilant given the significant fluctuations in this ratio over the period analyzed.