Wolverine World Wide Inc (WWW)
Interest coverage
| Dec 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 102,700 | -121,200 | -135,300 | -103,100 | -73,600 | -337,100 | -303,700 | -288,800 | -288,700 | 106,300 | 56,900 | 43,600 | 73,200 | -78,000 | -37,000 | -79,700 | -108,700 | 92,000 | 110,300 | 144,800 |
| Interest expense (ttm) | US$ in thousands | 42,700 | 49,600 | 55,500 | 59,700 | 63,500 | 63,400 | 60,400 | 54,400 | 47,300 | 39,800 | 36,900 | 36,500 | 37,400 | 41,400 | 44,600 | 45,400 | 43,600 | 39,300 | 34,700 | 30,900 |
| Interest coverage | 2.41 | -2.44 | -2.44 | -1.73 | -1.16 | -5.32 | -5.03 | -5.31 | -6.10 | 2.67 | 1.54 | 1.19 | 1.96 | -1.88 | -0.83 | -1.76 | -2.49 | 2.34 | 3.18 | 4.69 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $102,700K ÷ $42,700K
= 2.41
Interest coverage ratio is a financial metric used to assess a company's ability to cover its interest expenses with its earnings before interest and taxes (EBIT). A higher interest coverage ratio indicates a company's stronger ability to meet its interest obligations.
Analyzing Wolverine World Wide Inc's interest coverage over the last few years, we observe fluctuations in the ratio. As of March 31, 2020, the interest coverage ratio was a healthy 4.69, suggesting the company had sufficient earnings to cover its interest payments nearly five times over.
However, from the second half of 2020 onwards, the interest coverage ratio began to decline significantly, dipping into negative territory by the end of 2020 and remaining negative until the third quarter of 2022. A negative interest coverage ratio indicates that the company's earnings were insufficient to cover its interest expenses during those periods, raising concerns about its financial health and sustainability.
From the fourth quarter of 2022 onwards, the interest coverage ratio improved, indicating a better ability to cover interest payments with earnings. Notably, by the end of December 2024, the interest coverage ratio stood at 2.41, suggesting a moderate improvement in the company's capacity to meet its interest obligations.
In conclusion, Wolverine World Wide Inc's interest coverage has shown fluctuations, including periods of strength and weakness. Investors and stakeholders may want to monitor this ratio closely to assess the company's ability to manage its debt and interest obligations in the future.
Peer comparison
Dec 31, 2024