Encore Capital Group (Encore Capital Group) Interest Coverage

: 0.79 (As of Dec. 2023)

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Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income by its Interest Expense. Encore Capital Group's Operating Income for the three months ended in Dec. 2023 was $40 Mil. Encore Capital Group's Interest Expense for the three months ended in Dec. 2023 was $-50 Mil. Encore Capital Group's interest coverage for the quarter that ended in Dec. 2023 was 0.79. The higher the ratio, the stronger the company's financial strength is.

Warning Sign:

Ben Graham prefers companies' interest coverage to be at least 5. Encore Capital Group Inc interest coverage is 1.47, which is low.

The historical rank and industry rank for Encore Capital Group's Interest Coverage or its related term are showing as below:

ECPG' s Interest Coverage Range Over the Past 10 Years
Min: 1.3 Med: 1.83 Max: 3.73
Current: 1.47

ECPG's Interest Coverage is ranked worse than
91.3% of 23 companies
in the Banks industry
Industry Median: 67.74 vs ECPG: 1.47

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Encore Capital Group Interest Coverage Historical Data

The historical data trend for Encore Capital Group's Interest Coverage can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.

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Encore Capital Group Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Interest Coverage

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2.10

2.55

3.73

3.36

1.47

Encore Capital Group Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Interest Coverage	Get a 7-Day Free Trial															0.05	1.65	1.90	1.60	0.79

Competitive Comparison

For the Mortgage Finance subindustry, Encore Capital Group's Interest Coverage, along with its competitors' market caps and Interest Coverage data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Encore Capital Group Interest Coverage Distribution

For the Banks industry and Financial Services sector, Encore Capital Group's Interest Coverage distribution charts can be found below:

* The bar in red indicates where Encore Capital Group's Interest Coverage falls into.

Encore Capital Group Interest Coverage Calculation

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

If Interest Expense is negative and Operating Income is positive, then

Interest Coverage

-1

Operating Income

Interest Expense

Else if Interest Expense is negative and Operating Income is negative, then

The company did not have earnings to cover the interest expense.

Else if Interest Expense is 0 and Long-Term Debt & Capital Lease Obligation is 0, then

The company had no debt ⁽¹⁾.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Encore Capital Group's Interest Coverage for the fiscal year that ended in Dec. 2023 is calculated as

Here, for the fiscal year that ended in Dec. 2023, Encore Capital Group's Interest Expense was $-186 Mil. Its Operating Income was $273 Mil. And its Long-Term Debt & Capital Lease Obligation was $2,818 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Dec. 2023 )	/	Interest Expense (A: Dec. 2023 )
	=	-1	*	273.461	/	-186.207
	=	1.47

Encore Capital Group's Interest Coverage for the quarter that ended in Dec. 2023 is calculated as

Here, for the three months ended in Dec. 2023, Encore Capital Group's Interest Expense was $-50 Mil. Its Operating Income was $40 Mil. And its Long-Term Debt & Capital Lease Obligation was $2,818 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Dec. 2023 )	/	Interest Expense (Q: Dec. 2023 )
	=	-1	*	39.733	/	-50.284
	=	0.79

The higher the ratio, the stronger the company's Financial Strength is.

Encore Capital Group (NAS:ECPG) Interest Coverage Explanation

Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.

Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .

Encore Capital Group Interest Coverage Related Terms

Thank you for viewing the detailed overview of Encore Capital Group's Interest Coverage provided by GuruFocus.com. Please click on the following links to see related term pages.

Encore Capital Group (Encore Capital Group) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Banks » Encore Capital Group Inc (NAS:ECPG) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

ECP:Germany

Address

350 Camino De La Reina, Suite 100, San Diego, CA, USA, 92108

Website

https://www.encorecapital.com

Encore Capital Group Inc is a specialty finance company. It provides debt recovery solutions for consumers and property owners across a broad range of financial assets. The company purchase portfolios of defaulted consumer receivables at deep discounts to face value and manage them by working with individuals as the consumer repay their obligations and work toward financial recovery. Encore has only a reportable segment being portfolio purchasing and recovery.

Executives

Jonathan C Clark	officer: Executive VP, CFO & Treasurer	300 CONTINENTAL DRIVE, NEWARK DE 19713
Laura Olle	director	350 CAMINO DE LA REINA, SUITE 100, SAN DIEGO CA 92108
John Yung	officer: President, Intl. and Cabot	350 CAMINO DE LA REINA, SUITE 100, SAN DIEGO CA 92108
William C. Goings	director	1015 A ST, TACOMA WA 98402
Andrew Eric Asch	officer: SVP, General Counsel	350 CAMINO DE LA REINA, SUITE 100, SAN DIEGO CA 92627
Ryan B Bell	officer: EVP and COO of MCM	350 CAMINO DE LA REINA, SUITE 100, SAN DIEGO, CA 92108
Gregory L. Call	officer: Sr. VP, GC & Secretary	350 CAMINO DE LA REINA, SUITE 100, SAN DIEGO CA 92108
Peter Reck	officer: Chief Accounting Officer	C/O ICAHN ENTERPRISES L.P., 767 FIFTH AVENUE, SUITE 4600, NEW YORK NY 10153
Wendy Hannam	director	350 CAMINO DE LA REINA, SUITE 100, SAN DIEGO CA 92108
Craig A. Buick	officer: Cabot Credit Management CEO	350 CAMINO DE LA REINA, SUITE 100, SAN DIEGO CA 92108
A. Knight Angela	director	350 CAMINO DE LA REINA, SUITE 100, SAN DIEGO CA 92108
Jeffrey Albert Hilzinger	director	3 CEDAR RIDGE DRIVE, CHESTER NJ 07930
Jcf Iii Europe Holdings L.p.	10 percent owner	C/O J.C. FLOWERS & CO., 767 FIFTH AVENUE, 23RD FLOOR, NEW YORK NY 10153
Ashish Masih	officer: EVP, US Debt Purchasing & Ops.	350 CAMINO DE LA REINA, SUITE 100, SAN DIEGO CA 92108
Kenneth J Stannard	officer: Cabot Credit Management CEO	350 CAMINO DE LA REINA, SUITE 100, SAN DIEGO CA 92108