Graham Holdings Co (GHC)

Interest coverage

		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	Mar 31, 2020
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	1,184,211	485,690	472,333	573,307	471,562	409,591	368,468	118,765	175,867	241,994	226,952	465,271	484,201	705,183	775,591	677,604	427,261	285,819	237,375	250,766
Interest expense (ttm)	US$ in thousands	186,149	172,630	158,544	78,935	73,901	53,312	53,081	57,280	54,403	47,768	45,611	36,991	34,022	41,231	39,056	39,080	38,310	29,494	29,023	30,032
Interest coverage		6.36	2.81	2.98	7.26	6.38	7.68	6.94	2.07	3.23	5.07	4.98	12.58	14.23	17.10	19.86	17.34	11.15	9.69	8.18	8.35

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,184,211K ÷ $186,149K
= 6.36

Graham Holdings Co's interest coverage ratio has exhibited fluctuations over the provided periods. The interest coverage ratio measures the company's ability to cover its interest expenses with its operating income. A higher ratio indicates a stronger ability to meet interest obligations.

From March 31, 2020, to June 30, 2021, the interest coverage ratio showed a consistent increasing trend, reaching its peak at 19.86 on June 30, 2021. This indicates a significant improvement in the company's ability to cover its interest expenses.

However, from September 30, 2021, to December 31, 2024, the interest coverage ratio experienced volatility, with fluctuations between 2.81 and 7.68. The lowest point was recorded on June 30, 2022, at 4.98, which may raise concerns about the company's ability to meet its interest payments comfortably.

It is important to note that a declining interest coverage ratio could signal potential financial distress or instability within the company. Analysts and investors should closely monitor this ratio in future periods to assess the company's financial health and its ability to manage debt obligations effectively.