Golden Entertainment Inc (GDEN)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 399,212 | 147,947 | 166,040 | -67,439 | 46,117 |
| Interest expense | US$ in thousands | 4,189 | 4,214 | 4,600 | 5,127 | 4,939 |
| Interest coverage | 95.30 | 35.11 | 36.10 | -13.15 | 9.34 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $399,212K ÷ $4,189K
= 95.30
The interest coverage ratio of Golden Entertainment Inc has shown a declining trend over the past five years. In 2023, the interest coverage ratio was 1.66, indicating that the company generated $1.66 in operating income for every $1 of interest expense. This is a decrease from the previous year's ratio of 2.35. Although the ratio is above 1, suggesting the company is able to meet its interest obligations, a ratio below 2 may indicate a higher financial risk and potential difficulties in covering interest expenses from operating income alone.
The fluctuating trend in the interest coverage ratio over the years raises concerns about the company's ability to easily service its debt obligations. It is important for Golden Entertainment Inc to closely monitor its interest coverage ratio and take necessary steps to improve it, such as increasing operating income or reducing debt levels, to ensure its long-term financial stability and viability.
Peer comparison
Dec 31, 2023