Live Nation Entertainment Inc (LYV)
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 | 1,065,400 | 1,328,480 | 678,697 | -445,351 | -1,629,830 |
| Interest expense | US$ in thousands | 325,974 | 350,244 | 278,483 | 282,440 | 226,832 |
| Interest coverage | 3.27 | 3.79 | 2.44 | -1.58 | -7.19 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,065,400K ÷ $325,974K
= 3.27
The interest coverage ratio indicates Live Nation Entertainment Inc's ability to cover its interest expenses with its operating income. A ratio below 1 implies that the company is not generating enough operating income to cover its interest expenses.
At the end of December 31, 2020, the interest coverage ratio was -7.19, signifying a worrisome situation where the company's operating income was insufficient to cover its interest expenses. This could indicate financial distress or a high debt burden.
By December 31, 2021, the interest coverage ratio improved to -1.58 but still remained below 1, suggesting ongoing challenges in meeting interest obligations with operating income.
The trend took a positive turn by December 31, 2022, when the interest coverage ratio increased to 2.44, indicating that the company's operating income was more comfortably covering its interest expenses. This improvement suggests a better financial position.
Continuing this positive trajectory, the interest coverage ratio further rose to 3.79 by December 31, 2023, and maintained a relatively stable level at 3.27 by December 31, 2024. These ratios above 1 demonstrate Live Nation Entertainment Inc's strengthened ability to meet interest payments from its operating earnings.
Overall, the company has shown progress in addressing its interest coverage concerns, moving from a perilous position of inadequate coverage to a more stable and healthier financial condition over the analyzed period.
Peer comparison
Dec 31, 2024