Marathon Digital Holdings Inc (MARA)
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 | 287,949 | -693,598 | -12,950 | -10,425 | -4,239 |
| Interest expense | US$ in thousands | 10,350 | 14,981 | 1,570 | 21 | 52 |
| Interest coverage | 27.82 | -46.30 | -8.25 | -496.43 | -81.52 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $287,949K ÷ $10,350K
= 27.82
Marathon Digital Holdings Inc's interest coverage has shown significant fluctuations over the last five years. In 2023, the interest coverage ratio improved significantly to 27.82, indicating that the company's operating income was 27.82 times higher than its interest expenses for the year.
The sharp improvement in the interest coverage ratio in 2023 is a positive sign, reflecting the company's ability to comfortably meet its interest obligations with its operating income. However, it's important to note that the negative ratios in 2022, 2021, 2020, and 2019 indicate that the company's operating income was insufficient to cover its interest expenses during those years.
The drastic negative values in 2020 and 2019 suggest that the company faced significant challenges in generating enough income to cover its interest payments during those periods. It's crucial for Marathon Digital Holdings Inc to maintain a healthy interest coverage ratio to ensure financial sustainability and avoid potential liquidity issues associated with high interest expenses relative to operating income.
Peer comparison
Dec 31, 2023