Vista Outdoor Inc (VSTO)
Interest coverage
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 50,453 | 107,855 | 646,222 | 291,429 | -131,803 |
| Interest expense | US$ in thousands | 10,098 | 6,702 | 25,264 | 25,574 | 38,791 |
| Interest coverage | 5.00 | 16.09 | 25.58 | 11.40 | -3.40 |
March 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $50,453K ÷ $10,098K
= 5.00
The interest coverage ratio measures a company's ability to meet its interest payments on debt obligations. A higher ratio indicates a stronger ability to cover interest expenses.
Looking at the trend for Vista Outdoor Inc's interest coverage ratio over the past five years, we see fluctuations. In 2024, the interest coverage ratio was 5.00, indicating that the company generated sufficient earnings to cover its interest expenses. This figure represents a decrease compared to the previous year, which had a ratio of 16.09.
In 2023, Vista Outdoor Inc demonstrated a significantly higher interest coverage ratio of 16.09, indicating a strong ability to service its interest payments. This was an improvement from 2022, where the ratio was 25.58. The company's interest coverage ratio remained healthy in 2022, reflecting a robust earnings base relative to its interest obligations.
In contrast, in 2021, the interest coverage ratio declined to 11.40. Although it remained above 1, showing that the company could still cover its interest payments, the decrease from the previous year's ratio raised some concerns about the company's ability to service its debt.
The most notable observation is the significant decline in the interest coverage ratio in 2020 to -3.40. A negative ratio indicates that the company's earnings were insufficient to cover its interest expenses. This could be a red flag, suggesting financial distress or an unsustainable debt burden during that period.
Overall, the trend in Vista Outdoor Inc's interest coverage ratio shows variability over the past five years, with fluctuations in performance. Investors and analysts should monitor this ratio closely to assess the company's ability to meet its interest payments and manage its debt obligations effectively.
Peer comparison
Mar 31, 2024