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.