Hasbro Inc (HAS)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 668,200 | -1,522,800 | 432,500 | 761,600 | 523,200 |
| Interest expense | US$ in thousands | 171,200 | 186,300 | 171,000 | 179,700 | 201,100 |
| Interest coverage | 3.90 | -8.17 | 2.53 | 4.24 | 2.60 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $668,200K ÷ $171,200K
= 3.90
The interest coverage ratio for Hasbro Inc has shown fluctuating trends over the years. In 2020, the ratio was 2.60, indicating that the company's operating income was able to cover its interest expenses approximately 2.6 times. This improved significantly in 2021 to 4.24, suggesting a stronger ability to meet interest obligations. However, by 2022, the ratio decreased to 2.53, indicating a slight decline in the company's ability to cover interest expenses.
The year 2023 saw a substantial decrease in the interest coverage ratio to -8.17, reflecting that Hasbro Inc's operating income was insufficient to cover its interest expenses during that period. This is a concerning indicator as it suggests financial instability and potential difficulties in meeting interest payments.
Fortunately, by 2024, the interest coverage ratio improved to 3.90, showing a recovery in the company's ability to cover interest costs. Overall, it is important for Hasbro Inc to regularly monitor and improve its interest coverage ratio to maintain financial health and meet its debt obligations effectively.