Penn National Gaming Inc (PENN)

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	129,200	-34,900	974,600	941,100	-290,100
Interest expense	US$ in thousands	470,500	464,700	758,200	561,700	543,200
Interest coverage		0.27	-0.08	1.29	1.68	-0.53

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $129,200K ÷ $470,500K
= 0.27

Based on the interest coverage ratios provided for Penn National Gaming Inc, we can see fluctuations in the company's ability to cover its interest expenses over the years.

As of December 31, 2020, the interest coverage ratio was -0.53, indicating that the company was unable to cover its interest expenses with its operating income, which could be a concerning sign of financial distress.

By December 31, 2021, the interest coverage improved to 1.68, suggesting that the company's operating income became sufficient to cover its interest payments. However, this ratio is still relatively low, indicating that the company's ability to meet its interest obligations may be fragile.

In the following years, the interest coverage ratio continued to fluctuate, reaching 1.29 by December 31, 2022, recording a slight decrease to 1.29. By December 31, 2023, the ratio declined significantly to -0.08, implying that the company's operating income fell short of covering its interest expenses, which is a concerning development.

As of December 31, 2024, the interest coverage ratio improved slightly to 0.27, but it still indicates that Penn National Gaming Inc may be facing challenges in meeting its interest obligations.

Overall, the trend in the interest coverage ratios shows that Penn National Gaming Inc has been operating with variable capacity to cover its interest payments, with some periods of insufficient coverage. Investors and stakeholders should monitor these ratios closely to assess the company's financial health and ability to meet its debt obligations.