Monarch Casino & Resort Inc (MCRI)

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 34,776 32,670 56,328 82,174 108,834 111,672 116,025 112,384 110,563 107,675 97,130 95,717 86,416 82,412 72,299 44,344 36,632 24,626 22,521 39,635
Interest expense (ttm) US$ in thousands 608 363 218 7 307 763 1,163 1,489 1,541 1,445 -1,763 -689 1,045 17,185 21,793 21,793 21,634 6,869 6,669 6,669
Interest coverage 57.20 90.00 258.39 11,739.14 354.51 146.36 99.76 75.48 71.75 74.52 — — 82.69 4.80 3.32 2.03 1.69 3.59 3.38 5.94

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $34,776K ÷ $608K
= 57.20

The interest coverage ratio measures a company's ability to meet its interest obligations on its debt using its operating income. A higher interest coverage ratio indicates a greater ability to cover interest expenses and suggests lower financial risk.

Analyzing the interest coverage ratio of Monarch Casino & Resort Inc over the past few quarters reveals fluctuations. The interest coverage ratio stood at 5.94 as of March 31, 2020, indicating the company's operating income was 5.94 times the amount of its interest expense. However, this ratio declined to 1.69 by December 31, 2020, which might raise concerns about the company's ability to meet interest payments comfortably.

In subsequent quarters, the interest coverage ratio improved but remained volatile. For example, as of March 31, 2023, the ratio increased to 75.48, signifying a significant improvement in the company's ability to cover interest expenses. This positive trend continued with the ratio reaching 354.51 by December 31, 2023, indicating a substantial increase in profitability and ability to service debt.

However, there was a significant anomaly noted on March 31, 2024, where the interest coverage ratio spiked to 11,739.14. Such a drastic increase suggests a potential error or irregularity in the data reported for that period, as such a high ratio is typically not realistic or sustainable.

Overall, fluctuations in Monarch Casino & Resort Inc's interest coverage ratio indicate varying levels of financial risk and operational efficiency. Investors and stakeholders should closely monitor these ratios for trends and anomalies to assess the company's financial health and debt servicing capability.