Meta Platforms Inc. (META)
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 | 69,379,000 | 62,399,000 | 58,797,000 | 53,342,000 | 46,751,000 | 36,766,000 | 28,682,000 | 27,648,000 | 28,945,000 | 35,131,000 | 39,890,000 | 43,899,000 | 46,753,000 | 46,943,000 | 44,560,000 | 38,156,000 | 32,671,000 | 28,754,000 | 27,899,000 | 26,562,000 |
| Interest expense (ttm) | US$ in thousands | 698,000 | 595,000 | 532,000 | 519,000 | 446,000 | 470,000 | 337,000 | 226,000 | 176,000 | 16,000 | 16,000 | 16,000 | 16,000 | 15,000 | 15,000 | 15,000 | 14,000 | 22,000 | 22,000 | 21,000 |
| Interest coverage | 99.40 | 104.87 | 110.52 | 102.78 | 104.82 | 78.23 | 85.11 | 122.34 | 164.46 | 2,195.69 | 2,493.12 | 2,743.69 | 2,922.06 | 3,129.53 | 2,970.67 | 2,543.73 | 2,333.64 | 1,307.00 | 1,268.14 | 1,264.86 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $69,379,000K ÷ $698,000K
= 99.40
The interest coverage ratio for Meta Platforms Inc. has shown a generally increasing trend from March 31, 2020, to September 30, 2021, indicating the company's ability to meet its interest obligations through its operating income. During this period, the ratio has more than doubled from 1,264.86 to 3,129.53, reflecting a strong ability to cover interest expenses.
However, from December 31, 2021, to December 31, 2024, the interest coverage ratio has exhibited some volatility and a declining trend. This suggests that the company's ability to cover its interest expenses with operating income has weakened over time.
The significant drop in the interest coverage ratio from December 31, 2022, to March 31, 2023, shines a light on a potential strain on Meta Platforms Inc.'s financial health, as the ratio fell from 164.46 to 122.34 within a short span. The subsequent decrease in the ratio until September 30, 2024, points to ongoing challenges in meeting interest payments from operating profits.
Overall, it is essential for Meta Platforms Inc. to closely monitor its interest coverage ratio and take appropriate measures to enhance its profitability and operational efficiency to ensure sustainable financial health and meet its debt obligations.
Peer comparison
Dec 31, 2024