Viad Corp (VVI)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 82,794 | 68,084 | -66,119 | -341,961 | 38,740 |
| Interest expense | US$ in thousands | 47,978 | 34,891 | 28,324 | 17,887 | 14,199 |
| Interest coverage | 1.73 | 1.95 | -2.33 | -19.12 | 2.73 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $82,794K ÷ $47,978K
= 1.73
Viad Corp.'s interest coverage ratio has fluctuated over the past five years. In 2023, the interest coverage ratio improved to 1.97, indicating the company's ability to cover its interest expenses had strengthened compared to the previous year. However, it remains below a comfortable level of 3 or higher, which may signal some level of financial risk.
In 2022, the interest coverage ratio was 1.59, showing a slight decline from the previous year. The negative interest coverage ratios in 2021 and 2020, at -2.07 and -6.98 respectively, raise concerns about the company's ability to cover its interest expenses with its operating income during those years. This suggests financial distress and a heightened risk of default on debt obligations.
A positive sign was recorded in 2019 when the interest coverage ratio stood at 5.73, reflecting a strong ability to cover interest payments with operating income. Overall, Viad Corp.'s interest coverage has been unstable, and investors and creditors should closely monitor this ratio as it is a key indicator of the company's financial health and risk levels.
Peer comparison
Dec 31, 2023