Dave & Buster’s Entertainment (PLAY)

Interest coverage

		Jan 31, 2025	Oct 31, 2024	Jul 31, 2024	Apr 30, 2024	Feb 4, 2024	Jan 31, 2024	Oct 31, 2023	Oct 29, 2023	Jul 31, 2023	Jul 30, 2023	Apr 30, 2023	Jan 31, 2023	Jan 29, 2023	Oct 31, 2022	Oct 30, 2022	Jul 31, 2022	May 1, 2022	Apr 30, 2022	Jan 31, 2022	Jan 30, 2022
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	206,900	254,500	350,700	283,300	214,000	206,900	196,700	299,500	350,279	345,087	298,095	206,795	192,409	213,901	282,505	298,954	290,510	213,450	193,905	226,523
Interest expense (ttm)	US$ in thousands	127,800	129,500	124,400	122,000	120,500	118,500	123,600	125,400	126,981	124,544	120,018	117,718	104,337	85,274	68,291	51,830	46,669	47,622	49,959	50,645
Interest coverage		1.62	1.97	2.82	2.32	1.78	1.75	1.59	2.39	2.76	2.77	2.48	1.76	1.84	2.51	4.14	5.77	6.22	4.48	3.88	4.47

January 31, 2025 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $206,900K ÷ $127,800K
= 1.62

Based on the provided data on Dave & Buster’s Entertainment interest coverage ratios over time, we observe fluctuations in the company's ability to cover its interest expenses with its operating income.

The interest coverage ratio is a financial metric used to evaluate a company's ability to meet its interest obligations on outstanding debt. A higher interest coverage ratio indicates that the company is more capable of servicing its debt with its earnings.

From January 30, 2022, to May 1, 2022, the interest coverage ratio ranged between 3.88 and 6.22, displaying a relatively strong ability to cover interest expenses with operating income during that period. However, there was a decline in the interest coverage ratio in the subsequent quarters, with ratios falling below 3 at times, indicating a decline in the company's ability to cover interest expenses comfortably.

The trend continued with fluctuations in the interest coverage ratio, indicating potential challenges in meeting interest obligations with operating income. The most recent data point on January 31, 2025, shows an interest coverage ratio of 1.62, suggesting a relatively weaker ability to cover interest expenses at that point in time.

Overall, the trend in Dave & Buster’s Entertainment's interest coverage ratios highlights the importance of monitoring the company's ability to generate sufficient earnings to meet its interest payments and manage its debt obligations effectively.