Amazon.com Inc (AMZN)

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	68,593,000	40,707,000	-3,572,000	39,964,000	25,841,000
Interest expense	US$ in thousands	—	3,182,000	2,367,000	1,809,000	1,647,000
Interest coverage		—	12.79	-1.51	22.09	15.69

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $68,593,000K ÷ $—K
= —

Interest coverage ratio is a key financial metric used to evaluate a company's ability to meet its interest obligations from its operating income. It is calculated by dividing the earnings before interest and taxes (EBIT) by the interest expense.

Looking at Amazon.com Inc's interest coverage ratio over the past few years, we can see the following trends:

1. December 31, 2020: The interest coverage ratio was 15.69, indicating that the company generated more than enough earnings to cover its interest expenses. This suggests a strong ability to meet interest payments from its operating income.

2. December 31, 2021: The interest coverage ratio improved to 22.09, reflecting an even stronger ability to cover interest expenses with operating earnings. This indicates a positive trend in the company's financial health.

3. December 31, 2022: The interest coverage ratio declined significantly to -1.51. A negative interest coverage ratio suggests that the company's operating income was not sufficient to cover its interest expenses during this period. This could indicate potential financial distress and the need to closely monitor the company's financial performance.

4. December 31, 2023: The interest coverage ratio recovered to 12.79, showing an improvement in the company's ability to cover interest expenses compared to the previous year. However, it is still lower than the levels seen in 2020 and 2021.

5. December 31, 2024: The interest coverage ratio data is unavailable (denoted by "---"), making it difficult to assess the company's financial health for that year.

In conclusion, Amazon.com Inc's interest coverage ratio has shown fluctuation over the years, with strong performance in 2020 and 2021, a significant decline in 2022, partial recovery in 2023, and an unknown status for 2024. Investors and analysts should pay close attention to the company's interest coverage ratio as it provides insights into its ability to meet debt obligations and manage financial risk.