Walt Disney Company (DIS)

Interest coverage

		Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	1,760,000	3,328,000	474,000	-518,000	15,326,000
Interest expense	US$ in thousands	-1,973,000	-1,549,000	-1,546,000	1,647,000	1,246,000
Interest coverage		—	—	—	-0.31	12.30

September 30, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $1,760,000K ÷ $-1,973,000K
= —

The interest coverage ratio measures a company's ability to meet its interest obligations based on its earnings. A higher ratio indicates a better capacity to cover interest expenses.

Walt Disney Co (The) has shown a varying trend in interest coverage over the past five years. In the fiscal year ending on September 30, 2023, the interest coverage ratio stood at 4.95, reflecting an improvement compared to the previous year's 4.90. This signifies that the company's earnings are nearly five times its interest expenses, indicating a strong ability to cover these obligations.

However, in the fiscal year ending on October 2, 2021, the interest coverage ratio dropped to 2.86, indicating a potentially lower ability to meet interest obligations compared to the previous two years. This was a significant decline from the 2.98 recorded in the fiscal year ending on October 3, 2020.

The highest interest coverage ratio of 9.43 was observed in the fiscal year ending on September 28, 2019, reflecting a robust capacity to cover interest expenses. It's important to note that a higher interest coverage ratio generally indicates a lower risk of insolvency due to interest payment defaults.

Overall, the trend in Walt Disney Co (The) interest coverage ratio demonstrates fluctuations, suggesting varying levels of ability to cover interest expenses over the past five years. This indicates the importance of monitoring the company's earnings in relation to its interest obligations.