Caesars Entertainment Corporation (CZR)

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	2,292,000	2,206,000	2,128,000	2,009,000	1,363,000	945,000	561,000	711,000	1,018,000	1,085,000	526,000	-186,000	-412,000	-454,219	-24,219	142,933	411,077	434,316	399,085	375,347
Interest expense (ttm)	US$ in thousands	2,394,000	2,394,000	2,377,000	2,347,000	2,303,000	2,293,000	2,292,000	2,301,000	2,320,000	2,327,000	2,233,000	1,725,000	1,213,000	689,000	276,000	279,798	286,308	292,729	254,814	214,421
Interest coverage		0.96	0.92	0.90	0.86	0.59	0.41	0.24	0.31	0.44	0.47	0.24	-0.11	-0.34	-0.66	-0.09	0.51	1.44	1.48	1.57	1.75

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $2,292,000K ÷ $2,394,000K
= 0.96

To analyze Caesars Entertainment Inc's interest coverage, we can see that the interest coverage ratio has been relatively stable over the past eight quarters, ranging between 0.61 and 1.11. The interest coverage ratio measures the company's ability to meet its interest obligations from its operating income.

The interest coverage ratio of 1.09 in Q4 2023 indicates that Caesars Entertainment can cover its interest expenses 1.09 times over with its operating income. This suggests that the company's operating income is just sufficient to cover its interest expenses in that quarter.

The consistent range of interest coverage ratios around 1.0 indicates that the company's ability to cover its interest expenses has remained at a similar level over the past two years. However, it is worth noting that an interest coverage ratio of less than 1.0, as seen in Q3 and Q4 of 2022 (0.67 and 0.82 respectively), suggests that the company's operating income was not sufficient to cover its interest expenses during those periods.

Overall, a consistently low interest coverage ratio could indicate a higher risk of default on debt obligations due to inadequate operating income to cover interest expenses. Caesars Entertainment Inc should continue to monitor its interest coverage ratio and strive to improve it to ensure financial stability and meet its debt obligations comfortably.