Graham Holdings Co (GHC)

Interest coverage

		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	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	355,889	306,401	365,181	115,907	172,782	237,968	224,038	462,661	482,318	704,987	776,820	679,240	445,975	304,199	254,458	268,494	456,234	339,677	415,755	413,419
Interest expense (ttm)	US$ in thousands	63,301	53,312	53,081	57,280	54,403	47,768	45,532	36,912	33,943	41,152	39,056	39,080	38,310	29,494	29,023	30,032	29,779	29,118	28,477	37,256
Interest coverage		5.62	5.75	6.88	2.02	3.18	4.98	4.92	12.53	14.21	17.13	19.89	17.38	11.64	10.31	8.77	8.94	15.32	11.67	14.60	11.10

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $355,889K ÷ $63,301K
= 5.62

The interest coverage ratio for Graham Holdings Co. fluctuated over the past eight quarters, ranging from 2.76 to 4.36. The company's ability to cover its interest expenses improved in Q3 and Q2 of 2023, with ratios of 4.07 and 4.36, respectively, indicating its strong capacity to meet interest obligations from operating profits. However, the interest coverage ratio decreased slightly to 3.74 in Q1 2023 compared to the previous quarter.

In comparison to Q4 2022, the Q4 2023 interest coverage ratio decreased from 4.10 to 2.91, suggesting a potential decrease in the company's ability to cover interest payments. It is essential for stakeholders to monitor this trend and assess the impact on the company's financial health and ability to service its debt obligations. Overall, while the recent ratios indicate a generally healthy interest coverage, the decreasing trend from the previous quarter warrants further attention and analysis.