Netflix Inc (NFLX)
Interest coverage
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
---|---|---|---|---|---|---|
Earnings before interest and tax (EBIT) | US$ in thousands | 10,417,600 | 6,905,230 | 5,970,140 | 6,605,720 | 3,966,850 |
Interest expense | US$ in thousands | 718,733 | 699,826 | 706,212 | 765,620 | 767,499 |
Interest coverage | 14.49 | 9.87 | 8.45 | 8.63 | 5.17 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $10,417,600K ÷ $718,733K
= 14.49
Netflix Inc's interest coverage ratio has been on an upward trend over the past few years, indicating the company's improving ability to meet its interest obligations from its operating income. As of December 31, 2020, the interest coverage ratio was 5.17, which increased to 8.63 by December 31, 2021. Subsequently, the ratio remained relatively stable around the range of 8 to 9 in the following years, reaching 8.45 by December 31, 2022, and 9.87 by December 31, 2023. Notably, by December 31, 2024, the interest coverage ratio significantly improved to 14.49, reflecting Netflix's strengthened capacity to cover its interest expenses with its earnings. This consistent enhancement in the interest coverage ratio suggests that Netflix has been effectively managing its interest costs relative to its operating income, which could signify a positive financial health and sustainability for the company.