Upbound Group Inc. (UPBD)
Interest coverage
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 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 | 296,783 | 242,322 | 231,535 | 127,062 |
| Interest expense (ttm) | US$ in thousands | 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 | 31,031 | 36,520 | 40,283 | 40,997 |
| Interest coverage | 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 | 9.56 | 6.64 | 5.75 | 3.10 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $166,285K ÷ $113,418K
= 1.47
The interest coverage ratio for Upbound Group Inc. has shown fluctuations over the past few quarters. The trend indicates a decline in the company's ability to cover its interest expenses from its operating profits. The ratio has decreased from 15.54 in December 2020 to 1.47 in December 2023, which is a significant drop.
This indicates that the company's earnings before interest and taxes (EBIT) may not be sufficient to cover its interest expenses. A lower interest coverage ratio suggests a higher financial risk for the company as it may struggle to meet its interest obligations.
Overall, the declining trend in interest coverage for Upbound Group Inc. raises concerns about its financial health and ability to service its debt effectively. Management should closely monitor this ratio and take appropriate actions to improve the company's financial stability and reduce its risk of default.
Peer comparison
Dec 31, 2023