Wyndham Hotels & Resorts Inc (WH)

Interest coverage

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	492,000	500,000	556,000	428,000	-46,000
Interest expense	US$ in thousands	124,000	102,000	80,000	93,000	112,000
Interest coverage		3.97	4.90	6.95	4.60	-0.41

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $492,000K ÷ $124,000K
= 3.97

The interest coverage ratio is a key financial metric used to assess a company's ability to meet its interest payments on outstanding debt. It is calculated by dividing a company's earnings before interest and taxes (EBIT) by its interest expense.

Based on the data provided for Wyndham Hotels & Resorts Inc:
- As of December 31, 2020, the interest coverage ratio was -0.41, indicating that the company's EBIT was insufficient to cover its interest expenses, potentially raising concerns about debt servicing capability.
- By December 31, 2021, the interest coverage ratio improved significantly to 4.60, suggesting that the company's EBIT is now able to cover its interest expenses comfortably. This indicates a positive trend towards financial stability.
- The ratio further improved to 6.95 by December 31, 2022, showing continued strength in the company's ability to meet interest obligations.
- However, there was a slight decline in the interest coverage ratio to 4.90 by December 31, 2023, which could be a point of concern if this trend continues.
- Finally, as of December 31, 2024, the interest coverage ratio was 3.97, indicating that the company's EBIT is still able to cover its interest expenses, but not as strongly as in previous periods.

Overall, the interest coverage ratios for Wyndham Hotels & Resorts Inc show a mix of fluctuations, with improvements from 2020 to 2022, followed by a slight decline in 2023 and a moderate decrease in 2024. Monitoring this ratio over time will be important to assess the company's ongoing ability to service its debt obligations.