Graham Holdings Co (GHC)
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 | 355,889 | 172,782 | 482,318 | 445,975 | 456,234 |
| Interest expense | US$ in thousands | 63,301 | 54,403 | 33,943 | 38,310 | 29,779 |
| Interest coverage | 5.62 | 3.18 | 14.21 | 11.64 | 15.32 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $355,889K ÷ $63,301K
= 5.62
The interest coverage ratio for Graham Holdings Co. has exhibited some fluctuations over the past five years. In 2023, the company's interest coverage ratio decreased to 2.91 from 4.10 in 2022. This decrease suggests that the company's ability to cover its interest expenses with its operating income has weakened compared to the previous year. However, it is important to note that a ratio of 2.91 still indicates that the company is generating enough operating income to cover its interest expenses.
Looking back further, the interest coverage ratio was 4.20 in 2021, 3.99 in 2020, and 7.00 in 2019. The ratio has shown a general decreasing trend since 2019, indicating a potential decline in the company's ability to meet its interest obligations with operating income over the years.
Overall, while the recent decrease in the interest coverage ratio may raise some concerns about the company's ability to handle its interest payments, it is essential to consider the historical trend and compare the ratio to industry benchmarks for a more comprehensive analysis of Graham Holdings Co.'s financial health.
Peer comparison
Dec 31, 2023