Paramount Global Class B (PARA)

Interest coverage

		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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	-49,000	-646,000	-650,000	282,000	2,262,000	4,681,000	5,019,000	5,486,000	6,175,000	4,803,000	4,802,000	4,493,000	3,988,000	2,688,000	2,790,000	3,309,000	4,241,000	6,116,000	6,179,000	5,907,000
Interest expense (ttm)	US$ in thousands	920,000	928,000	927,000	917,000	931,000	942,000	954,000	967,000	986,000	1,013,000	1,029,000	1,049,000	1,031,000	1,002,000	989,000	963,000	962,000	1,404,000	1,273,000	1,152,000
Interest coverage		-0.05	-0.70	-0.70	0.31	2.43	4.97	5.26	5.67	6.26	4.74	4.67	4.28	3.87	2.68	2.82	3.44	4.41	4.36	4.85	5.13

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-49,000K ÷ $920,000K
= -0.05

The interest coverage ratio measures a company's ability to pay its interest expenses on outstanding debt. A higher ratio indicates a stronger ability to cover interest payments from operating income. Paramount Global's interest coverage ratio has been volatile over the past eight quarters, ranging from as low as -0.83 to as high as 3.57.

In Q4 2023, the interest coverage ratio improved to 2.06, indicating that the company generated more than enough operating income to cover its interest expenses. However, in the previous quarter, Q3 2023, the ratio was negative at -0.83, suggesting that the company's operating income was insufficient to cover its interest payments.

The trend for Paramount Global's interest coverage ratio is inconsistent, with fluctuations in the company's ability to cover interest expenses. It is important for investors and creditors to closely monitor this ratio to assess the company's financial health and ability to meet its debt obligations.