United Airlines Holdings Inc (UAL)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 4,211,000 | 2,337,000 | -1,022,000 | -6,359,000 | 4,301,000 |
| Interest expense | US$ in thousands | 1,794,000 | 1,686,000 | 1,593,000 | 1,008,000 | 731,000 |
| Interest coverage | 2.35 | 1.39 | -0.64 | -6.31 | 5.88 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $4,211,000K ÷ $1,794,000K
= 2.35
United Airlines Holdings Inc's interest coverage ratio has shown fluctuations over the past five years. The interest coverage ratio measures the company's ability to meet its interest obligations from its operating income. A higher ratio indicates a stronger ability to cover interest expenses.
In 2023, the interest coverage ratio improved significantly to 5.45, indicating that United Airlines had more than enough operating income to cover its interest expenses. This is a positive sign as it shows the company's ability to comfortably meet its interest obligations.
In 2022, the interest coverage ratio was 1.80, suggesting that United Airlines had just enough operating income to cover its interest expenses. While the ratio improved from the previous year, it was still relatively low, indicating a risk of potential difficulty in meeting interest payments.
In 2021 and 2020, the interest coverage ratios were negative (-2.85 and -9.53, respectively), indicating that United Airlines did not generate enough operating income to cover its interest expenses. This signifies a concerning financial position as the company was unable to meet its interest obligations from its operating income during those years.
In 2019, the interest coverage ratio was 8.86, indicating a strong ability to cover interest expenses. This suggests a positive financial position for United Airlines during that year.
Overall, the trend in United Airlines Holdings Inc's interest coverage ratio shows fluctuation, with improvements in recent years but with significant challenges in 2020 and 2021. Monitoring this ratio is crucial for assessing the company's financial health and ability to service its debt obligations.
Peer comparison
Dec 31, 2023