Mattel Inc (MAT)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 741,277 | 712,898 | 712,896 | 692,644 | 609,414 | 510,614 | 407,132 | 472,593 | 667,069 | 873,469 | 871,431 | 794,777 | 746,508 | 639,748 | 624,462 | 516,697 | 327,700 | 282,328 | 67,267 | 67,392 |
| Interest expense (ttm) | US$ in thousands | 118,773 | 120,714 | 122,043 | 122,659 | 123,700 | 125,500 | 128,700 | 130,900 | 132,800 | 132,900 | 151,100 | 156,400 | 253,900 | 270,000 | 268,300 | 279,800 | 198,300 | 209,200 | 206,500 | 203,100 |
| Interest coverage | 6.24 | 5.91 | 5.84 | 5.65 | 4.93 | 4.07 | 3.16 | 3.61 | 5.02 | 6.57 | 5.77 | 5.08 | 2.94 | 2.37 | 2.33 | 1.85 | 1.65 | 1.35 | 0.33 | 0.33 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $741,277K ÷ $118,773K
= 6.24
The interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt. A higher ratio indicates the company is more capable of covering its interest expenses.
For Mattel Inc, the interest coverage ratio has shown significant improvement over the past few years. As of December 31, 2024, the interest coverage ratio stands at 6.24, indicating the company's ability to cover its interest payments approximately 6.24 times. This upward trend in the interest coverage ratio from 2020 to 2024 is a positive sign of the company's improving financial health and operational efficiency.
The consistent increase in the interest coverage ratio reflects Mattel's better financial performance, profitability, and cash flow generation, enabling the company to comfortably meet its interest obligations. This trend suggests that Mattel's financial position has strengthened over the years, reducing its risk of defaulting on its debt payments.
Overall, the improving interest coverage ratio for Mattel Inc signifies a positive financial outlook and indicates the company's ability to manage its debt obligations effectively. Investors and stakeholders may view this trend favorably as a sign of the company's improving financial stability and operational performance.