Electronic Arts Inc (EA)
Interest coverage
| Mar 31, 2025 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 1,199,000 | 1,474,000 | 1,419,000 | 1,414,000 | 1,591,000 | 1,512,000 | 1,458,000 | 1,495,000 | 1,393,000 | 1,556,000 | 1,350,000 | 1,245,000 | 1,126,000 | 942,000 | 1,088,000 | 897,000 | 1,046,000 | 1,272,000 | 1,384,000 | 1,530,000 |
| Interest expense (ttm) | US$ in thousands | 71,000 | 85,000 | 87,000 | 87,000 | 71,000 | 51,000 | 41,000 | 41,000 | 32,000 | 43,000 | 49,000 | 49,000 | 58,000 | 53,000 | 50,000 | 47,000 | 43,000 | 42,000 | 42,000 | 42,000 |
| Interest coverage | 16.89 | 17.34 | 16.31 | 16.25 | 22.41 | 29.65 | 35.56 | 36.46 | 43.53 | 36.19 | 27.55 | 25.41 | 19.41 | 17.77 | 21.76 | 19.09 | 24.33 | 30.29 | 32.95 | 36.43 |
March 31, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,199,000K ÷ $71,000K
= 16.89
Electronic Arts Inc's interest coverage ratio has experienced fluctuations over the period from June 30, 2020, to March 31, 2025. The interest coverage ratio measures a company's ability to meet its interest obligations from its operating income.
The interest coverage ratio for Electronic Arts Inc started at a comfortable level of 36.43 on June 30, 2020, indicating the company's strong ability to cover its interest expenses. However, this ratio gradually declined over the following quarters, reaching a low point of 16.25 on June 30, 2024.
The declining trend in the interest coverage ratio may raise concerns about the company's ability to continue meeting its interest obligations using its operating income alone. A lower interest coverage ratio suggests that Electronic Arts Inc may be taking on more debt relative to its earnings, which could increase its financial risk.
It is worth noting that the interest coverage ratio showed some improvement in the later periods, with a slight increase to 16.31 on September 30, 2024, and further improvements in the subsequent quarters. The ratio rebounded to 16.89 on March 31, 2025, indicating a potential improvement in the company's ability to cover its interest expenses.
Overall, it is important for stakeholders to monitor Electronic Arts Inc's interest coverage ratio closely to assess the company's financial health and ability to manage its debt obligations effectively.
Peer comparison
Mar 31, 2025