Mattel Inc (MAT)
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 | 607,613 | 662,582 | 736,543 | 387,460 | 40,618 |
| Interest expense | US$ in thousands | 123,786 | 132,818 | 253,937 | 198,332 | 201,044 |
| Interest coverage | 4.91 | 4.99 | 2.90 | 1.95 | 0.20 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $607,613K ÷ $123,786K
= 4.91
The interest coverage ratio for Mattel Inc has shown a generally positive trend over the past five years, indicating the company's ability to meet its interest obligations. The ratio has increased from 0.20 in 2019 to 4.91 in 2023, reflecting a significant improvement in the company's ability to cover its interest expenses with operating income.
In 2021, the interest coverage ratio was 2.90, which was lower compared to the ratios in 2022 and 2023. However, it still indicates that Mattel had a sufficient operating income to cover its interest expenses comfortably.
Overall, the consistent improvement in the interest coverage ratio over the years suggests that Mattel's financial performance has been strengthening, providing a favorable indication of the company's ability to manage its debt and meet its financial obligations.