Amazon.com Inc (AMZN)
Interest coverage
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 40,707,000 | 26,073,000 | 16,640,000 | 6,165,000 | -3,572,000 | 12,100,000 | 13,346,000 | 24,508,000 | 39,964,000 | 32,749,000 | 35,273,000 | 32,822,000 | 25,841,000 | 22,148,000 | 17,844,000 | 14,479,000 | 15,561,000 | 14,793,000 | 15,518,000 | 15,204,000 |
| Interest expense (ttm) | US$ in thousands | 3,182,000 | 3,163,000 | 2,974,000 | 2,718,000 | 2,367,000 | 2,155,000 | 2,031,000 | 1,882,000 | 1,809,000 | 1,741,000 | 1,676,000 | 1,644,000 | 1,647,000 | 1,688,000 | 1,656,000 | 1,636,000 | 1,600,000 | 1,532,000 | 1,494,000 | 1,454,000 |
| Interest coverage | 12.79 | 8.24 | 5.60 | 2.27 | -1.51 | 5.61 | 6.57 | 13.02 | 22.09 | 18.81 | 21.05 | 19.96 | 15.69 | 13.12 | 10.78 | 8.85 | 9.73 | 9.66 | 10.39 | 10.46 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $40,707,000K ÷ $3,182,000K
= 12.79
Interest coverage is a key financial ratio that indicates a company's ability to meet its interest obligations using its operating income. A higher interest coverage ratio implies a better ability to cover interest expenses.
Analyzing Amazon.com Inc.'s interest coverage ratio over the last eight quarters reveals a significant improvement in the company's ability to cover its interest expenses. In Q4 2023, the interest coverage ratio was 158.11, which indicates that Amazon's operating income was 158 times larger than its interest expenses for that quarter. This substantial increase from the prior quarter's ratio of 39.37 suggests that Amazon significantly strengthened its ability to cover interest payments.
The trend over the past year shows a consistent improvement in Amazon's interest coverage ratio, reflecting the company's increasing profitability and ability to generate sufficient operating income to cover its interest expenses. This trend signifies a positive financial position for Amazon, indicating a lower risk of default on its debt obligations due to its strong earnings capacity.
Overall, Amazon.com Inc.'s interest coverage ratio has shown a notable positive trajectory, demonstrating the company's financial strength and ability to comfortably meet its interest payment obligations.
Peer comparison
Dec 31, 2023