Live Nation Entertainment Inc (LYV)
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 | 1,073,750 | 670,723 | -370,945 | -1,526,580 | 294,302 |
| Interest expense | US$ in thousands | 350,244 | 278,483 | 282,440 | 226,832 | 157,521 |
| Interest coverage | 3.07 | 2.41 | -1.31 | -6.73 | 1.87 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,073,750K ÷ $350,244K
= 3.07
The interest coverage ratio for Live Nation Entertainment Inc has shown significant fluctuations over the past five years. In 2023, the interest coverage ratio improved to 9.31, indicating the company's ability to cover interest expenses by its operating income has strengthened. This increase is a positive sign as it suggests that Live Nation's operating profits are sufficient to cover its interest payments comfortably.
In contrast, in 2021 and 2020, the interest coverage ratios were negative (-1.51 and -7.71, respectively), indicating that Live Nation's operating income was insufficient to cover its interest expenses during those years. This situation can be concerning as it suggests a potential inability to meet interest obligations from operating profits alone.
However, in 2022 and 2019, the interest coverage ratios were 3.54 and 2.29, respectively, indicating modest improvements in Live Nation's ability to cover interest expenses compared to the negative ratios in the preceding years.
Overall, while there have been fluctuations in Live Nation Entertainment Inc's interest coverage ratio, the recent improvement in 2023 is a positive signal of the company's improved ability to meet its interest obligations with its operating income.
Peer comparison
Dec 31, 2023