Gen Digital Inc. (GEN)
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 | 1,196,000 | 1,567,000 | 1,565,000 | 1,190,000 | 1,131,000 | 1,092,000 | 1,106,000 | 1,297,000 | 1,183,000 | 978,000 | 919,000 | 1,156,000 | 1,180,000 | 1,377,000 | 1,363,000 | 1,172,000 | 1,033,000 | 1,016,000 | 1,186,000 | 1,019,000 |
| Interest expense (ttm) | US$ in thousands | 578,000 | 604,000 | 628,000 | 652,000 | 669,000 | 676,000 | 665,000 | 540,000 | 401,000 | 264,000 | 142,000 | 125,000 | 126,000 | 130,000 | 130,000 | 136,000 | 144,000 | 159,000 | 178,000 | 187,000 |
| Interest coverage | 2.07 | 2.59 | 2.49 | 1.83 | 1.69 | 1.62 | 1.66 | 2.40 | 2.95 | 3.70 | 6.47 | 9.25 | 9.37 | 10.59 | 10.48 | 8.62 | 7.17 | 6.39 | 6.66 | 5.45 |
March 31, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,196,000K ÷ $578,000K
= 2.07
Gen Digital Inc.'s interest coverage ratio has shown varying trends over the past few years. The interest coverage ratio measures the company's ability to pay its interest expenses on outstanding debt. A higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations.
From June 30, 2020, to September 30, 2021, Gen Digital Inc.'s interest coverage ratio steadily increased from 5.45 to 10.48, reflecting an improving ability to cover interest expenses. This positive trend indicated that the company was generating sufficient earnings to comfortably cover its interest payments.
However, starting from December 31, 2021, the interest coverage ratio began to decline, reaching a low point of 1.62 by December 31, 2023. This significant decrease might signal a potential issue with the company's ability to service its debt commitments using its operating income.
Although there was a slight recovery in the interest coverage ratio by June 30, 2024, and a further increase by March 31, 2025, the ratio remained below the levels seen during the peak period. This suggests that Gen Digital Inc. may still be facing challenges in generating enough earnings to cover its interest expenses effectively.
Overall, the fluctuating trend in Gen Digital Inc.'s interest coverage ratio highlights the importance of closely monitoring the company's financial performance and debt repayment capabilities to ensure sustainable operations and financial health.
Peer comparison
Mar 31, 2025