Under Armour Inc C (UA)

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	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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	-116,693	-60,682	-88,003	232,655	271,468	296,607	270,258	283,811	334,683	412,088	413,883	486,290	456,005	342,511	51,632	-613,438	-595,211	-514,861	-356,669	236,770
Interest expense (ttm)	US$ in thousands	30,000	29,300	28,700	23,548	15,396	10,244	11,244	11,244	4,585	7,602	12,166	16,891	30,262	31,740	22,480	17,270	10,974	5,994	4,254	4,254
Interest coverage		-3.89	-2.07	-3.07	9.88	17.63	28.95	24.04	25.24	73.00	54.21	34.02	28.79	15.07	10.79	2.30	-35.52	-54.24	-85.90	-83.84	55.66

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-116,693K ÷ $30,000K
= -3.89

Based on the data provided for Under Armour Inc C, the interest coverage ratio has shown fluctuating trends over the period from December 31, 2019, to December 31, 2024.

The interest coverage ratio indicates the company's ability to meet its interest obligations on outstanding debt with its operating income. A higher interest coverage ratio is generally considered favorable as it suggests the company is more capable of servicing its debt.

Initially, in December 2019, the interest coverage ratio stood at a healthy 55.66, indicating a strong ability to cover interest expenses. However, in the subsequent quarters ending March 2020, June 2020, and September 2020, the interest coverage ratio turned negative, indicating that the company's operating income was insufficient to cover its interest expenses during those periods.

The trend continued through December 2020, with the interest coverage ratio remaining negative at -35.52. However, starting from March 31, 2021, the interest coverage ratio began to show signs of improvement, turning positive and gradually increasing.

By December 31, 2021, the interest coverage ratio had improved significantly to 28.79 and continued to demonstrate an upward trend through June 30, 2022, and September 30, 2022.

The company's interest coverage ratio continued to improve, reaching its peak at 73.00 as of December 31, 2022. However, from that point onwards, the ratio began to decline until September 30, 2024, where it turned negative again at -2.07, indicating a potential strain on the company's ability to cover interest expenses with operating income.

By the end of the period on December 31, 2024, the interest coverage ratio remained negative at -3.89, suggesting a potential concern regarding the company's ability to meet its interest obligations.

In conclusion, while the interest coverage ratio of Under Armour Inc C has shown fluctuations over the period analyzed, it is important for investors and stakeholders to monitor the company's ability to generate sufficient operating income to cover its interest expenses in order to assess its financial health and sustainability.