Upbound Group Inc. (UPBD)
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 | Mar 31, 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 288,126 | 264,950 | 253,301 | 263,543 | 166,285 | 152,286 | 130,272 | 103,399 | 149,180 | 143,455 | 166,499 | 214,889 | 265,178 | 283,123 | 303,125 | 250,462 | 238,104 | 251,259 | 207,684 | 285,610 |
| Interest expense (ttm) | US$ in thousands | 110,585 | 114,348 | 115,434 | 115,309 | 113,418 | 110,923 | 105,996 | 96,839 | 87,709 | 79,726 | 76,508 | 77,854 | 70,874 | 55,534 | 39,142 | 22,868 | 15,325 | 16,775 | 20,158 | 26,089 |
| Interest coverage | 2.61 | 2.32 | 2.19 | 2.29 | 1.47 | 1.37 | 1.23 | 1.07 | 1.70 | 1.80 | 2.18 | 2.76 | 3.74 | 5.10 | 7.74 | 10.95 | 15.54 | 14.98 | 10.30 | 10.95 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $288,126K ÷ $110,585K
= 2.61
Interest coverage is a financial ratio that indicates a company's ability to pay interest expenses on its outstanding debt. A higher interest coverage ratio signifies the company has more earnings available to cover its interest obligations.
In the case of Upbound Group Inc., the interest coverage ratio fluctuated over the given periods. It started at a robust level of around 10.95 in March 2020 and remained relatively stable for the next few quarters, indicating a healthy ability to meet its interest payments.
However, the interest coverage ratio began to decline in June 2021, dropping to 7.74, and further decreased to 1.70 by December 2022. This substantial decline suggests that the company's earnings may not be sufficient to cover its interest expenses comfortably, raising concerns about its financial stability.
Subsequently, the interest coverage ratio showed some signs of improvement in the following periods, reaching 2.61 by December 2024. Although the ratio increased, it remains significantly lower compared to the initial years, indicating the company may still be facing challenges in meeting its interest obligations.
Overall, the trend in Upbound Group Inc.'s interest coverage ratio suggests a fluctuating financial position regarding its ability to cover interest expenses, highlighting the importance of monitoring the company's profitability and debt management closely.
Peer comparison
Dec 31, 2024