Amazon.com Inc (AMZN)

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	40,707,000	-3,572,000	39,964,000	25,841,000	15,588,000
Interest expense	US$ in thousands	3,182,000	2,367,000	1,809,000	1,647,000	1,600,000
Interest coverage		12.79	-1.51	22.09	15.69	9.74

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $40,707,000K ÷ $3,182,000K
= 12.79

Amazon.com Inc.'s interest coverage ratio has displayed significant fluctuations over the past five years. In 2023, the interest coverage ratio improved significantly to 158.11, indicating a strong ability to meet interest obligations comfortably. This sharp increase from the previous year's 8.89 suggests a substantial improvement in the company's ability to cover its interest expenses from its operating profits.

However, in 2022, the interest coverage ratio was at a relatively low level of 8.89, indicating a potential strain on the company's ability to cover interest expenses. The ratio rebounded in 2021 to 18.28 and remained relatively stable in 2020 and 2019 at 20.92 and 18.92, respectively.

The significant improvement in 2023 reflects a positive trend, suggesting that Amazon.com Inc. has increased its operating profits significantly relative to its interest expenses, enhancing its financial stability and creditworthiness. Overall, the company's interest coverage ratio has shown variability, but the most recent data point to a strong financial position in terms of covering interest payments.