Penn National Gaming Inc (PENN)

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 -28,600 515,700 1,423,600 1,471,200 935,900 877,900 1,005,900 1,119,000 1,106,300 1,062,800 1,065,100 537,600 -288,300 -411,800 -485,000 -143,300 622,800 698,600 660,900 640,903
Interest expense (ttm) US$ in thousands 469,600 554,200 634,100 712,400 760,200 701,200 648,200 591,900 566,900 558,700 555,900 552,500 546,300 543,500 534,400 533,700 535,900 594,800 575,400 556,273
Interest coverage -0.06 0.93 2.25 2.07 1.23 1.25 1.55 1.89 1.95 1.90 1.92 0.97 -0.53 -0.76 -0.91 -0.27 1.16 1.17 1.15 1.15

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-28,600K ÷ $469,600K
= -0.06

Interest coverage ratio is a financial metric that indicates a company's ability to meet its interest obligations on its outstanding debt. It is calculated by dividing a company's earnings before interest and taxes (EBIT) by its interest expenses. A higher interest coverage ratio signifies the company's better ability to cover its interest payments.

In the case of PENN Entertainment Inc, the interest coverage ratios over the past eight quarters have fluctuated. In Q4 of 2023, the interest coverage ratio was 0.92, indicating that the company's EBIT was only sufficient to cover 92% of its interest expenses. This might raise concerns about the company's ability to meet its interest obligations.

The interest coverage improved in Q3 and Q2 of 2023 with ratios of 1.62 and 1.56 respectively, implying that the company's ability to cover its interest payments relatively improved during these periods. However, in Q1 of 2023, the ratio decreased to 1.49, suggesting a slight decrease in the company's ability to cover its interest expenses compared to the previous quarter.

Looking back at 2022, the interest coverage ratios were relatively stable, ranging from 1.51 to 2.00. The highest ratio of 2.00 in Q1 of 2022 indicates that the company's EBIT was double its interest expenses, reflecting a strong ability to cover interest payments during that period.

Overall, PENN Entertainment Inc's interest coverage ratios have shown some variability in recent quarters, with the company experiencing fluctuations in its ability to cover its interest obligations. It will be essential for investors and analysts to monitor these ratios closely to assess the company's financial health and its ability to service its debt in the coming quarters.