Netflix Inc (NFLX)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 6,905,230 | 5,970,140 | 6,605,720 | 3,966,850 | 2,688,250 |
| Interest expense | US$ in thousands | 699,826 | 706,212 | 765,620 | 767,499 | 626,023 |
| Interest coverage | 9.87 | 8.45 | 8.63 | 5.17 | 4.29 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $6,905,230K ÷ $699,826K
= 9.87
The interest coverage ratio of Netflix Inc. has shown a consistent increasing trend over the past five years, indicating the company's improved ability to cover its interest expenses with its operating profits. The ratio has increased from 4.16 in 2019 to 9.94 in 2023, signaling a significant enhancement in the company's capacity to meet its interest payment obligations. This trend suggests the company's improving financial stability and lower default risk, which may be attributed to the company's growing profitability and efficient management of interest expenses. Overall, the increasing trend in interest coverage ratio indicates a positive financial performance and a strong ability to service its debt obligations for Netflix Inc.