YETI Holdings Inc (YETI)
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 | 226,888 | 120,643 | 271,749 | 214,356 | 89,037 |
| Interest expense | US$ in thousands | 942 | 4,466 | 3,339 | 9,155 | 21,779 |
| Interest coverage | 240.86 | 27.01 | 81.39 | 23.41 | 4.09 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $226,888K ÷ $942K
= 240.86
The interest coverage ratio for YETI Holdings Inc has shown a significant improvement over the past five years, indicating the company's ability to meet its interest obligations from its operating income.
In 2019, the interest coverage ratio was 4.09, demonstrating that the company's operating income was only sufficient to cover its interest expenses around four times. This suggests a relatively lower level of financial stability at that time.
However, there was a substantial increase in the interest coverage ratio in subsequent years. By 2023, the interest coverage ratio had surged to 240.86, indicating a much stronger ability to cover interest expenses from operating income. This could be due to improved profitability, cost management, or lower interest expenses.
The trend of increasing interest coverage ratios from 2019 to 2023 shows a positive financial performance and a healthier financial position for YETI Holdings Inc. It suggests that the company has become more efficient in generating operating income to cover its interest payments, reducing the financial risk associated with debt obligations.
Peer comparison
Dec 31, 2023