Light & Wonder Inc (LNW)
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 | 667,000 | 642,000 | 650,000 | 567,000 | 498,000 | 463,000 | 696,000 | 3,966,000 | 4,015,000 | 3,911,000 | 3,545,000 | 251,000 | 110,000 | 96,000 | 32,000 | -92,000 | -128,000 | -222,000 | -49,000 | 135,000 |
| Interest expense (ttm) | US$ in thousands | 293,000 | 301,000 | 306,000 | 309,000 | 309,000 | 304,000 | 294,000 | 286,000 | 327,000 | 372,000 | 424,000 | 473,000 | 478,000 | 484,000 | 495,000 | 500,000 | 503,000 | 521,000 | 536,000 | 559,000 |
| Interest coverage | 2.28 | 2.13 | 2.12 | 1.83 | 1.61 | 1.52 | 2.37 | 13.87 | 12.28 | 10.51 | 8.36 | 0.53 | 0.23 | 0.20 | 0.06 | -0.18 | -0.25 | -0.43 | -0.09 | 0.24 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $667,000K ÷ $293,000K
= 2.28
Interest coverage ratio is a financial metric used to evaluate a company's ability to pay interest on its outstanding debt. It is calculated by dividing a company's earnings before interest and taxes (EBIT) by its interest expenses. A higher interest coverage ratio indicates that the company is more capable of servicing its debt obligations.
In the case of Light & Wonder Inc, the interest coverage ratio has varied significantly over the past few years. The company experienced negative interest coverage ratios in the range of -0.43 to -0.09 in 2020, indicating a potential inability to cover its interest expenses with its earnings during those periods.
However, the company's interest coverage improved in 2021 and continued to rise steadily through 2024. By March 31, 2024, Light & Wonder Inc achieved an interest coverage ratio of 1.83, which suggests a better ability to meet its interest payments through operating earnings.
Although the trend shows a positive improvement in the interest coverage ratio over the years, investors and creditors may continue to monitor the company's financial performance to ensure sustained profitability and sufficient earnings to cover its interest obligations. It is essential for Light & Wonder Inc to maintain a healthy interest coverage ratio to demonstrate financial stability and reduce the risk of default on its debt.
Peer comparison
Dec 31, 2024