Vector Group Ltd (VGR)
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 | 357,069 | 351,973 | 332,550 | 337,089 | 331,227 | 318,529 | 331,433 | 394,968 | 394,998 | 398,910 | 389,144 | 306,811 | 268,337 | 219,745 | 218,327 | 241,798 | 269,602 | 303,008 | 298,073 | 287,553 |
| Interest expense (ttm) | US$ in thousands | 108,617 | 109,099 | 109,441 | 113,041 | 110,665 | 111,129 | 111,757 | 109,105 | 112,728 | 113,149 | 113,086 | 114,372 | 121,278 | 127,455 | 132,255 | 135,650 | 137,543 | 161,564 | 179,685 | 195,353 |
| Interest coverage | 3.29 | 3.23 | 3.04 | 2.98 | 2.99 | 2.87 | 2.97 | 3.62 | 3.50 | 3.53 | 3.44 | 2.68 | 2.21 | 1.72 | 1.65 | 1.78 | 1.96 | 1.88 | 1.66 | 1.47 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $357,069K ÷ $108,617K
= 3.29
Vector Group Ltd's interest coverage ratio indicates the company's ability to meet its interest obligations with its earnings before interest and taxes (EBIT). The interest coverage ratio has been relatively stable in recent quarters, ranging from 2.03 to 3.23. This suggests that the company has generally been able to comfortably cover its interest expenses with its operating income.
An interest coverage ratio above 1 indicates that the company generates enough earnings to cover its interest payments. Vector Group Ltd's interest coverage ratios all exceed 1, reflecting a healthy financial position in terms of meeting its interest obligations.
The gradual improvement in the interest coverage ratio over the quarters, from 2.03 in Q3 2022 to 3.23 in Q4 2023, indicates that the company's operating performance has been strengthening, allowing it to better manage its interest costs. However, it is essential to monitor this ratio over time to ensure that the trend remains positive and that the company continues to generate sufficient earnings to cover its interest expenses.
Peer comparison
Dec 31, 2023