Hasbro Inc (HAS)
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 | -1,524,300 | 433,000 | 755,000 | 520,300 | 696,200 |
| Interest expense | US$ in thousands | 186,300 | 171,000 | 179,700 | 201,100 | 101,900 |
| Interest coverage | -8.18 | 2.53 | 4.20 | 2.59 | 6.83 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $-1,524,300K ÷ $186,300K
= -8.18
Interest coverage measures a company's ability to meet its interest payment obligations on its debt. A higher interest coverage ratio indicates a stronger ability to cover interest expenses with operating income. Looking at Hasbro, Inc.'s interest coverage ratio over the past five years, there has been a noticeable declining trend.
In 2023, Hasbro's interest coverage ratio decreased to 1.17, which is a significant drop from the previous year's ratio of 2.70. This suggests that Hasbro's operating income may not be sufficient to cover its interest expenses.
Furthermore, comparing the 2023 ratio to the ratios of 2021 and 2020, where the interest coverage was 5.00 and 3.72 respectively, highlights a significant deterioration in the company's ability to cover interest payments. The 2019 ratio of 9.09 indicates a notable decline in the company's financial health in terms of its ability to meet interest obligations.
This decreasing trend in the interest coverage ratio for Hasbro, Inc. raises concerns about the company's financial stability and ability to service its debt obligations. It would be advisable for stakeholders and investors to closely monitor the company's future financial performance and management of its debt levels.