Paramount Global Class B (PARA)
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 | -49,000 | 2,262,000 | 6,175,000 | 3,988,000 | 4,241,000 |
| Interest expense | US$ in thousands | 920,000 | 931,000 | 986,000 | 1,031,000 | 962,000 |
| Interest coverage | -0.05 | 2.43 | 6.26 | 3.87 | 4.41 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $-49,000K ÷ $920,000K
= -0.05
Paramount Global's interest coverage ratio has shown a declining trend over the past five years. The ratio indicates the company's ability to meet its interest obligations with its earnings before interest and taxes (EBIT). A lower interest coverage ratio suggests that the company may be less capable of servicing its debt obligations from its earnings.
In 2023, the interest coverage ratio stands at 2.06, a decrease from the previous year's ratio of 3.24. This decline may raise concerns about Paramount Global's ability to cover its interest payments comfortably. It is important to note that a ratio below 1 indicates that the company's EBIT is insufficient to cover its interest expenses.
Overall, Paramount Global's declining interest coverage ratios suggest a potential deterioration in its financial health and increasing financial risk related to its debt obligations. Investors and creditors may monitor this trend closely to assess the company's ability to manage its debt effectively in the future.
Peer comparison
Dec 31, 2023