Netflix Inc (NFLX)
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 | 10,630,280 | 9,680,870 | 8,877,700 | 8,050,000 | 6,905,220 | 5,791,799 | 5,501,609 | 5,445,979 | 5,970,139 | 6,500,482 | 6,557,452 | 6,544,052 | 6,605,722 | 6,569,043 | 5,776,193 | 5,215,833 | 3,966,846 | 3,590,377 | 3,704,817 | 3,133,016 |
| Interest expense (ttm) | US$ in thousands | 718,733 | 701,342 | 692,075 | 698,901 | 699,826 | 695,217 | 692,229 | 692,872 | 706,212 | 725,038 | 742,892 | 758,759 | 765,620 | 773,377 | 780,027 | 777,856 | 767,499 | 748,114 | 711,695 | 674,577 |
| Interest coverage | 14.79 | 13.80 | 12.83 | 11.52 | 9.87 | 8.33 | 7.95 | 7.86 | 8.45 | 8.97 | 8.83 | 8.62 | 8.63 | 8.49 | 7.41 | 6.71 | 5.17 | 4.80 | 5.21 | 4.64 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $10,630,280K ÷ $718,733K
= 14.79
Based on the provided data, the interest coverage ratio of Netflix Inc has been improving steadily over the past several periods, showing a positive trend.
The interest coverage ratio is a measure of a company's ability to cover its interest payments on outstanding debt. A higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations.
Initially, in March 31, 2020, Netflix's interest coverage ratio stood at 4.64, indicating that the company's operating income was 4.64 times its interest expense for that period. Over time, the interest coverage ratio increased consistently, reaching a peak of 14.79 on December 31, 2024, which reflects a significant improvement in Netflix's ability to cover its interest payments.
Overall, the upward trend in the interest coverage ratio suggests that Netflix has been effectively managing its debt obligations, generating sufficient income to comfortably cover its interest expenses. This positive trend indicates the company's financial stability and ability to service its debt effectively.