Under Armour Inc A (UAA)

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

The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt. In the case of Under Armour Inc A, the interest coverage ratio has fluctuated significantly over the periods mentioned.

As of December 31, 2019, the interest coverage ratio was 55.66, indicating a strong ability to cover interest expenses. However, there was a sharp decline in the ratio as of March 31, 2020, when it dropped to -83.84, suggesting that the company's earnings were insufficient to cover its interest payments.

This negative trend continued through June 30, 2020, and September 30, 2020, with interest coverage ratios of -85.90 and -54.24, respectively. These figures indicate a concerning financial position, where the company was struggling to cover its interest costs from its operating earnings.

Subsequently, there was a gradual improvement in the interest coverage ratio, moving into positive territory as of March 31, 2021. The ratio continued to increase through the following periods, showing a positive trend in the company's ability to meet its interest obligations.

By December 31, 2023, the interest coverage ratio reached a relatively healthy level of 17.63. However, the ratio dipped again by June 30, 2024, and September 30, 2024, dropping into negative territory once more at -3.07 and -2.07, respectively.

Despite the fluctuations observed in the interest coverage ratio of Under Armour Inc A, it is crucial for investors and stakeholders to monitor this metric closely, as it provides insights into the company's financial stability and ability to service its debt obligations.