Wyndham Hotels & Resorts Inc (WH)

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	500,000	556,000	428,000	-46,000	307,000
Interest expense	US$ in thousands	102,000	80,000	93,000	112,000	100,000
Interest coverage		4.90	6.95	4.60	-0.41	3.07

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $500,000K ÷ $102,000K
= 4.90

Wyndham Hotels & Resorts Inc's interest coverage ratio has exhibited fluctuations over the past five years. The interest coverage ratio measures the company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio is generally preferred as it indicates that the company is more capable of meeting its interest obligations.

In 2023, the interest coverage ratio stood at 5.05, showing a decrease from the previous year but still indicating that the company's operating income was able to cover its interest expenses adequately. The higher the ratio above 1, the better the company's ability to meet its interest obligations.

Comparing to the previous years, the interest coverage ratio was relatively strong in 2022 at 6.55, which improved from the previous year and indicated a better ability to cover interest expenses. In 2021, the ratio was at 4.89, showing a slight decrease from 2020 but still at a reasonable level. However, in 2020, the interest coverage ratio was lower at 1.86, indicating that the company's operating income was just sufficient to cover its interest costs.

In 2019, the interest coverage ratio improved to 4.64, suggesting a more favorable financial position compared to 2020. Overall, the trend in Wyndham Hotels & Resorts Inc's interest coverage ratio shows some variability, with fluctuations from year to year. It is essential for the company to maintain a healthy interest coverage ratio to demonstrate its ability to meet its debt obligations and ensure financial stability.