Dave & Buster’s Entertainment (PLAY)
Interest coverage
| Feb 4, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Feb 2, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 306,600 | 262,508 | 187,181 | -253,516 | 148,079 |
| Interest expense | US$ in thousands | 127,400 | 87,400 | 53,910 | 36,890 | 20,937 |
| Interest coverage | 2.41 | 3.00 | 3.47 | -6.87 | 7.07 |
February 4, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $306,600K ÷ $127,400K
= 2.41
The interest coverage ratio for Dave & Buster’s Entertainment has fluctuated over the past five years. In February 2024, the ratio stood at 2.41, indicating that the company generated earnings before interest and taxes (EBIT) 2.41 times larger than its interest expenses for that year. This figure represents a decrease from the previous year's ratio of 3.00.
In general, a higher interest coverage ratio is considered healthier as it suggests that the company has more earnings available to meet its interest obligations. The trend from 2020 to 2024 shows a decrease in the ratio, which could indicate potential issues with the company's ability to cover its interest expenses from operating earnings. It is noteworthy that in January 2021, the interest coverage ratio was negative (-6.87), implying that the company's EBIT was insufficient to cover its interest payments, posing a significant financial risk.
Overall, Dave & Buster’s Entertainment's interest coverage ratios reflect varying levels of financial health and ability to meet its interest obligations over the past five years. Monitoring this ratio going forward will be crucial in assessing the company's financial solvency and operational efficiency.
Peer comparison
Feb 4, 2024