Marriot Vacations Worldwide (VAC)
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 | 1,782,000 | 2,036,000 | 2,026,000 | 1,946,000 | 1,888,000 | 1,690,000 | 1,604,000 | 1,516,000 | 1,420,000 | 1,619,000 | 1,431,000 | 1,303,000 | 1,120,000 | 626,000 | 381,000 | 262,000 | 222,000 | 1,744,000 | 1,810,000 | 1,996,370 |
| Interest expense (ttm) | US$ in thousands | 73,000 | 61,000 | 131,000 | 125,000 | 118,000 | 127,000 | 134,000 | 148,000 | 164,000 | 166,000 | 162,000 | 160,000 | 150,000 | 112,000 | 75,000 | 34,000 | 1,000 | 32,000 | 46,000 | 55,284 |
| Interest coverage | 24.41 | 33.38 | 15.47 | 15.57 | 16.00 | 13.31 | 11.97 | 10.24 | 8.66 | 9.75 | 8.83 | 8.14 | 7.47 | 5.59 | 5.08 | 7.71 | 222.00 | 54.50 | 39.35 | 36.11 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,782,000K ÷ $73,000K
= 24.41
Marriott Vacations Worldwide Corp's interest coverage ratio has shown a fluctuating trend over the past eight quarters. The interest coverage ratio measures the company's ability to meet its interest obligations with its operating income.
In Q4 2023, the interest coverage ratio was 4.86, indicating that the company's operating income was able to cover its interest expenses 4.86 times. This represents a decrease from the previous quarter and a continuing downward trend from the higher levels seen earlier in the year.
The highest interest coverage ratio over the period was recorded in Q1 2023 at 7.44, suggesting a strong ability to meet interest payments. However, it is worth noting that the ratio has been gradually declining since then.
Overall, while Marriott Vacations Worldwide Corp has generally maintained a reasonable interest coverage ratio above 4.0, the recent downward trend indicates a potential decrease in the company's ability to cover its interest expenses with its operating income. It would be important for investors and stakeholders to monitor this trend closely to ensure the company's financial health and its ability to meet its debt obligations.