Electronic Arts Inc (EA)
Interest coverage
| Mar 31, 2025 | Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | — | 1,647,000 | 1,384,000 | 1,126,000 | 1,046,000 |
| Interest expense | US$ in thousands | 85,000 | 58,000 | 58,000 | 58,000 | 43,000 |
| Interest coverage | 0.00 | 28.40 | 23.86 | 19.41 | 24.33 |
March 31, 2025 calculation
Interest coverage = EBIT ÷ Interest expense
= $—K ÷ $85,000K
= 0.00
The interest coverage ratio of Electronic Arts Inc has been relatively healthy over the years, indicating the company's ability to meet its interest payment obligations comfortably. In March 2021, the interest coverage ratio stood at 24.33, demonstrating a strong capacity to cover interest expenses. However, there was a slight decrease by March 2022 to 19.41, which could indicate a slightly lower ability to cover interest payments.
By March 2023, the ratio improved to 23.86, showing a recovery in the company's ability to service its interest payment obligations. Furthermore, the ratio increased significantly to 28.40 by March 2024, indicating a marked improvement in the company's financial health and ability to cover interest expenses comfortably.
Interestingly, by March 2025, the interest coverage ratio dropped to 0.00, which could be a cause for concern as it suggests that the company may not have generated enough operating income to cover its interest expenses during that period.
Overall, while Electronic Arts Inc has generally maintained a solid interest coverage ratio over the years, the significant drop in the ratio in March 2025 raises questions about the company's financial performance and its ability to meet its interest obligations in that specific period.
Peer comparison
Mar 31, 2025