Dave & Buster’s Entertainment (PLAY)

Interest coverage

		Feb 4, 2024	Oct 29, 2023	Jul 30, 2023	Apr 30, 2023	Jan 29, 2023	Oct 30, 2022	Jul 31, 2022	May 1, 2022	Jan 30, 2022	Oct 31, 2021	Aug 1, 2021	May 2, 2021	Jan 31, 2021	Nov 1, 2020	Aug 2, 2020	May 3, 2020	Feb 2, 2020	Nov 3, 2019	Aug 4, 2019	May 5, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	306,600	294,308	305,808	285,208	262,508	231,849	226,218	248,885	187,181	86,591	5,175	-155,107	-253,516	-161,859	-98,413	28,916	148,079	151,457	160,430	160,146
Interest expense (ttm)	US$ in thousands	127,400	122,963	122,463	106,663	87,363	68,839	53,862	50,490	53,910	56,370	51,160	45,595	36,890	28,657	26,554	22,996	20,937	18,478	15,689	14,312
Interest coverage		2.41	2.39	2.50	2.67	3.00	3.37	4.20	4.93	3.47	1.54	0.10	-3.40	-6.87	-5.65	-3.71	1.26	7.07	8.20	10.23	11.19

February 4, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $306,600K ÷ $127,400K
= 2.41

Dave & Buster’s Entertainment has shown varying levels of interest coverage over the past few years. The interest coverage ratio measures a company's ability to pay its interest expenses from its operating income. A higher ratio indicates a stronger ability to meet interest obligations.

Looking at the data, the interest coverage ratio for Dave & Buster’s has fluctuated significantly. From February 2024 to November 2019, the company generally maintained healthy interest coverage ratios above 2, peaking at 11.19 in May 2019. This indicated a strong ability to cover its interest expenses using its operating income during this period.

However, there were also instances of lower interest coverage ratios, particularly in August 2021 and earlier, where the ratios fell below 1. This suggests that Dave & Buster’s faced challenges in meeting its interest obligations with its operating income during those periods.

Overall, the trend in interest coverage ratios for Dave & Buster’s shows periods of stability and strength, but also moments of weakness and potential financial strain. It is important for investors and stakeholders to monitor this ratio closely to assess the company's financial health and ability to meet its debt obligations.