Marathon Digital Holdings Inc (MARA)
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 | 306,111 | 287,949 | -693,598 | -12,950 | -10,425 |
| Interest expense | US$ in thousands | 12,996 | 10,350 | 14,981 | 1,570 | 21 |
| Interest coverage | 23.55 | 27.82 | -46.30 | -8.25 | -496.43 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $306,111K ÷ $12,996K
= 23.55
The interest coverage ratio reflects Marathon Digital Holdings Inc's ability to meet its interest payments on outstanding debt. A higher ratio indicates a stronger ability to cover interest expenses, while a lower ratio raises concerns about the company's financial health.
In December 2020, the interest coverage ratio was significantly negative at -496.43, indicating a severe inability to cover interest payments. This raises red flags about the company's financial stability and its ability to service its debt obligations.
By December 2021, the interest coverage ratio improved to -8.25, although still in negative territory, suggesting some progress in managing interest expenses but still falling short of comfortably covering interest payments.
In December 2022, the interest coverage ratio deteriorated to -46.30, indicating a decline in the company's ability to cover interest expenses compared to the previous year. This could signal increased financial strain or higher interest costs.
However, by December 2023, the interest coverage ratio turned positive at 27.82, indicating that Marathon Digital Holdings Inc could cover its interest payments more than 27 times. This is a positive sign of improved financial health and a strengthened ability to manage debt obligations.
In December 2024, the interest coverage ratio remained positive at 23.55, indicating a continued ability to meet interest payments comfortably. This demonstrates the company's sustained financial health and capacity to handle its debt obligations effectively.
Overall, the trend in Marathon Digital Holdings Inc's interest coverage ratios shows significant fluctuations, with periods of financial strain followed by improvements. It is crucial for the company to maintain a healthy interest coverage ratio to ensure its long-term financial sustainability and mitigate risks associated with debt repayment.
Peer comparison
Dec 31, 2024