eBay Inc (EBAY)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 2,537,000 | 3,970,000 | -1,366,000 | 667,000 | 3,649,000 |
| Interest expense | US$ in thousands | 259,000 | 263,000 | 235,000 | 269,000 | 304,000 |
| Interest coverage | 9.80 | 15.10 | -5.81 | 2.48 | 12.00 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $2,537,000K ÷ $259,000K
= 9.80
Interest coverage ratio indicates a company's ability to cover its interest expenses with its operating income. A higher ratio typically suggests a stronger financial position.
The interest coverage ratio for eBay Inc has shown fluctuations over the past five years. In December 2020, the ratio was 12.00, indicating a comfortable capacity to cover interest payments. However, by December 2021, the ratio declined to 2.48, suggesting a decrease in ability to cover interest expenses.
In December 2022, the interest coverage ratio turned negative at -5.81, indicating that operating income was insufficient to cover interest costs. This is a concerning sign as it signifies potential financial distress.
The situation improved significantly by December 2023 with a ratio of 15.10, showing a strong ability to cover interest payments. In December 2024, the ratio remained healthy at 9.80, pointing towards adequate earnings to meet interest obligations.
Overall, the interest coverage ratio for eBay Inc has shown variability, with a mix of strong and weak performance in different years. It is essential for investors and stakeholders to monitor this ratio closely to gauge the company's financial health and ability to service its debt obligations.
Peer comparison
Dec 31, 2024