Valvoline Inc (VVV)
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 | 280,700 | 247,200 | 244,200 | 218,800 | 197,600 | 220,300 | 240,800 | 249,000 | 260,200 | 240,100 | 328,400 | 347,100 | 412,900 | 485,000 | 422,000 | 436,000 | 415,000 | 398,000 | 390,000 | 390,000 |
| Interest expense (ttm) | US$ in thousands | 49,600 | 54,700 | 54,700 | 69,100 | 73,800 | 72,100 | 73,000 | 71,000 | 108,000 | 111,000 | 92,000 | 76,000 | 22,000 | 3,000 | 21,000 | 39,000 | 57,000 | 73,000 | 73,000 | 55,000 |
| Interest coverage | 5.66 | 4.52 | 4.46 | 3.17 | 2.68 | 3.06 | 3.30 | 3.51 | 2.41 | 2.16 | 3.57 | 4.57 | 18.77 | 161.67 | 20.10 | 11.18 | 7.28 | 5.45 | 5.34 | 7.09 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $280,700K ÷ $49,600K
= 5.66
The interest coverage ratio for Valvoline Inc has shown fluctuations over the past eight quarters. In Q1 2024, the interest coverage ratio was 8.68, indicating that the company's operating profit was 8.68 times the amount it needed to cover its interest expenses. This represents a strong position and suggests that the company is comfortably able to meet its interest obligations.
In contrast, in Q3 2023 and Q2 2023, the interest coverage ratios were relatively low at 1.02 and 1.57 respectively, indicating that the company's operating profit was barely sufficient to cover its interest expenses during those periods. This might raise concerns about the company's ability to service its debt obligations in the short term.
Overall, the trend in the interest coverage ratio for Valvoline Inc suggests some variability in the company's ability to cover its interest expenses. It is important for investors and stakeholders to monitor this ratio over time to assess the company's financial health and ability to meet its debt obligations.
Peer comparison
Dec 31, 2023