Cinemark Holdings Inc (CNK)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | -751,800 | 1,233,400 | 283,800 | 127,900 | 67,700 | -470,100 | -373,100 | -187,200 | -112,900 | 335,389 | 220,406 | 6,806 | -289,894 | -621,125 | -804,602 | -944,695 | -796,328 | -440,688 | -138,155 | 263,420 |
| Interest expense (ttm) | US$ in thousands | 154,900 | -148,000 | -152,000 | -149,500 | -150,400 | 152,700 | 153,000 | 154,000 | 155,300 | 152,720 | 152,313 | 151,213 | 149,713 | 149,209 | 147,793 | 141,834 | 129,900 | 117,188 | 105,578 | 99,466 |
| Interest coverage | -4.85 | — | — | — | — | -3.08 | -2.44 | -1.22 | -0.73 | 2.20 | 1.45 | 0.05 | -1.94 | -4.16 | -5.44 | -6.66 | -6.13 | -3.76 | -1.31 | 2.65 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-751,800K ÷ $154,900K
= -4.85
The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher ratio indicates a company is more capable of meeting its interest obligations.
For Cinemark Holdings Inc, the interest coverage ratio fluctuated significantly over the analyzed period. From March 2020 to June 2022, the company experienced negative interest coverage ratios, indicating that its operating income was insufficient to cover its interest expenses. This is a concerning trend as it suggests a potential risk of default on its debt obligations.
However, starting from March 2022, the interest coverage ratio began to improve, indicating that Cinemark's operating income was gaining strength relative to its interest payments. By September 2022, the ratio surpassed 1, indicating that the company's operating income was sufficient to cover its interest expenses.
It is important for investors and analysts to monitor Cinemark's interest coverage ratio closely to assess the company's financial health and its ability to manage debt obligations effectively. The improvement in the ratio in recent quarters is a positive sign, but further analysis and monitoring are necessary to evaluate the company's long-term financial sustainability.