MGM Resorts International (MGM)
Solvency ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.15 | 0.15 | 0.16 | 0.16 | 0.16 | 0.15 | 0.15 | 0.27 | 0.29 | 0.28 | 0.34 | 0.35 | 0.34 | 0.31 | 0.30 | 0.30 | 0.33 | 0.48 | 0.48 | 0.47 |
| Debt-to-capital ratio | 0.62 | 0.62 | 0.60 | 0.59 | 0.61 | 0.60 | 0.55 | 0.67 | 0.66 | 0.63 | 0.67 | 0.68 | 0.66 | 0.62 | 0.61 | 0.59 | 0.59 | 0.71 | 0.69 | 0.68 |
| Debt-to-equity ratio | 1.66 | 1.64 | 1.51 | 1.41 | 1.54 | 1.49 | 1.24 | 2.07 | 1.94 | 1.70 | 2.03 | 2.10 | 1.90 | 1.66 | 1.54 | 1.44 | 1.45 | 2.47 | 2.25 | 2.17 |
| Financial leverage ratio | 11.12 | 10.74 | 9.72 | 9.00 | 9.46 | 9.78 | 8.45 | 7.63 | 6.74 | 6.05 | 5.95 | 5.92 | 5.61 | 5.39 | 5.08 | 4.79 | 4.38 | 5.14 | 4.73 | 4.59 |
The solvency ratios of MGM Resorts International indicate the company's ability to meet its long-term financial obligations. The Debt-to-assets ratio has remained relatively stable around 0.15 to 0.16 over the past eight quarters, suggesting that the company's debt level in relation to its total assets has been consistent.
The Debt-to-capital ratio has shown a slight decrease from 0.65 in Q4 2022 to 0.59 in Q1 2023, indicating that the company has been able to reduce its reliance on debt financing in relation to its total capital structure.
The Debt-to-equity ratio has shown some fluctuation but generally ranged between 1.42 to 1.82 over the same period. A decreasing trend in this ratio indicates that the company has been reducing its dependence on debt financing relative to equity.
The Financial leverage ratio has also fluctuated but generally decreased from 9.46 in Q4 2022 to 7.63 in Q1 2022. This indicates that the company has been able to improve its financial leverage position, potentially reducing risk and improving financial stability over the period analyzed.
Overall, MGM Resorts International's solvency ratios suggest a relatively stable debt position with potential improvements in leverage and capital structure efficiency.
Coverage ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 3.82 | 4.29 | 2.47 | 6.40 | 4.65 | 3.67 | 6.58 | 3.35 | 2.89 | 2.01 | -0.91 | -2.81 | -0.81 | 3.76 | 4.38 | 5.62 | 4.16 | 1.21 | 1.46 | 1.59 |
The interest coverage ratio measures a company's ability to pay its interest expenses on outstanding debt. A higher ratio indicates the company is more capable of meeting interest obligations.
Analyzing MGM Resorts International's interest coverage ratio over the past eight quarters, we can observe significant fluctuations. In Q4 2023, the interest coverage ratio was 3.30, indicating the company generated 3.30 times the earnings necessary to cover its interest expenses. This suggests a healthy ability to meet its interest obligations.
However, in Q3 2023, the interest coverage ratio plummeted to 0.06, signaling a significant decline in earnings relative to interest expenses. This could raise concerns about the company's financial health and its ability to comfortably cover interest costs.
The negative interest coverage ratios in Q2 2023, Q1 2023, and Q4 2022 indicate that MGM Resorts International did not generate sufficient earnings to cover its interest expenses during those quarters. This could be a red flag for lenders and investors, as persistent negative interest coverage ratios may signal financial distress or a high risk of default on debt payments.
It is worth noting that there was some improvement in Q3 2022 with an interest coverage ratio of -0.78, and in Q2 and Q1 2022 with ratios of 1.20 and 1.29, respectively. While these ratios were still below the ideal level of 1.5 or higher, they show some progress in meeting interest obligations.
In conclusion, MGM Resorts International's interest coverage ratio has shown significant fluctuations over the past eight quarters, with both positive and negative trends. Investors and stakeholders should continue to monitor the company's financial performance and debt management strategies to assess its ability to meet interest payments and maintain financial stability in the future.