MGM Resorts International (MGM)

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 1,699,845 1,806,069 1,757,118 1,545,123 1,322,006 1,004,572 67,891 2,296,909 2,161,104 2,421,691 4,831,336 2,680,347 2,307,381 1,593,390 -750,931 -2,097,682 -2,043,922 -1,411,656 -447,930 952,741
Interest expense (ttm) US$ in thousands 443,230 441,527 440,824 440,030 460,293 490,547 504,549 529,163 594,954 659,299 734,176 800,389 799,593 786,795 760,554 714,538 676,380 688,181 729,876 788,949
Interest coverage 3.84 4.09 3.99 3.51 2.87 2.05 0.13 4.34 3.63 3.67 6.58 3.35 2.89 2.03 -0.99 -2.94 -3.02 -2.05 -0.61 1.21

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,699,845K ÷ $443,230K
= 3.84

Interest coverage is a key financial ratio used to assess a company's ability to meet its interest obligations through its earnings. In the case of MGM Resorts International, the interest coverage ratio has shown fluctuations over the provided time period.

- In March 2020, the interest coverage ratio was 1.21, indicating that the company's operating income was just able to cover its interest expenses.
- The ratio turned negative in the subsequent quarters up until March 2021, signaling that MGM Resorts International was not generating enough operating income to cover its interest payments.
- By September 2021, the interest coverage ratio improved to 2.03, indicating that the company's operating income was twice its interest expenses.
- Over the following quarters, the ratio continued to increase, reaching a peak of 6.58 in June 2022, suggesting a significant improvement in the company's ability to cover its interest obligations.
- However, the ratio dipped slightly in the subsequent quarters but generally remained above 3, indicating MGM Resorts International's solid ability to generate enough operating income to cover its interest payments.

Overall, the trend in MGM Resorts International's interest coverage ratio shows a mix of challenges and improvements in its ability to meet its interest obligations through operational earnings over the provided time frame.