Upbound Group Inc. (UPBD)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 288,126 | 166,285 | 149,179 | 265,178 | 238,104 |
| Interest expense | US$ in thousands | 110,585 | 113,418 | 87,708 | 70,874 | 15,325 |
| Interest coverage | 2.61 | 1.47 | 1.70 | 3.74 | 15.54 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $288,126K ÷ $110,585K
= 2.61
The interest coverage ratio of Upbound Group Inc. has shown a declining trend over the past five years, indicating a potential strain on the company's ability to cover its interest expenses with its operating income. In 2020, the interest coverage ratio was a healthy 15.54, suggesting a comfortable cushion to meet interest obligations. However, by the end of 2024, the ratio had decreased to 2.61, reflecting a decrease in the company's ability to cover its interest payments. This downward trend may raise concerns about the company's financial health and its ability to service its debt obligations efficiently. The significant decrease in the interest coverage ratio implies that Upbound Group Inc. may have encountered challenges in generating sufficient earnings to cover its interest expenses over the years, signaling a need for the company to closely monitor and manage its debt levels and operational efficiency.
Peer comparison
Dec 31, 2024