Valvoline Inc (VVV)
Interest coverage
| Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 367,200 | 302,800 | 295,900 | 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 |
| Interest expense (ttm) | US$ in thousands | 64,800 | 64,800 | 44,600 | 42,400 | 47,500 | 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 |
| Interest coverage | 5.67 | 4.67 | 6.63 | 6.62 | 5.20 | 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 |
September 30, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $367,200K ÷ $64,800K
= 5.67
The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. Valvoline Inc's interest coverage ratio has fluctuated over the past few quarters, ranging from a low of 2.16 to a high of 161.67.
A higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations, while a lower ratio may suggest potential financial distress. Valvoline's interest coverage has generally shown an improving trend over the periods analyzed, with some fluctuations.
It is important to note that extremely high interest coverage ratios, such as the 161.67 observed in December 2020, may be indicative of one-time events or accounting anomalies rather than sustainable operational performance. The company should aim for a consistent and reasonable interest coverage ratio to ensure stability and financial health in the long term.
Peer comparison
Sep 30, 2024