Paramount Skydance Corporation Class B Common Stock (PSKY)

Interest coverage

		Jun 30, 2025	Mar 31, 2025	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	1,372,000	-4,352,000	-5,317,000	-5,009,000	-4,765,000	458,000	-365,000	-589,000	-484,000	478,000	2,515,000	2,793,000	3,020,000	3,302,000	4,018,000	4,743,000	4,774,000	4,841,000	4,457,000	5,181,000
Interest expense (ttm)	US$ in thousands	855,000	856,000	860,000	867,000	890,000	915,000	920,000	928,000	927,000	917,000	931,000	942,000	954,000	967,000	986,000	1,013,000	1,029,000	1,049,000	1,031,000	1,379,000
Interest coverage		1.60	-5.08	-6.18	-5.78	-5.35	0.50	-0.40	-0.63	-0.52	0.52	2.70	2.96	3.17	3.41	4.08	4.68	4.64	4.61	4.32	3.76

June 30, 2025 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,372,000K ÷ $855,000K
= 1.60

The interest coverage ratio for Paramount Skydance Corporation Class B Common Stock exhibits a declining trend over the reported periods, indicating a diminishing ability to meet interest obligations from earnings before interest and taxes (EBIT). Initially, in September 2020, the ratio was 3.76, suggesting that the company's EBIT was approximately 3.76 times its interest expenses, a comfortable margin. This ratio gradually increased to a peak of 4.68 in September 2021, reflecting improved coverage during that period.

Subsequently, the ratio declined steadily from late 2021 into 2022, dropping below 3.0 by September 2022, indicating mounting financial stress or reduced earnings relative to interest obligations. By March 2023, the ratio fell sharply to 0.52, revealing that EBIT was only slightly exceeding interest expenses, and was insufficient to comfortably cover interest. The situation worsened further in June and September 2023, with the ratio turning negative (-0.52 and -0.63 respectively), signifying that EBIT was insufficient to cover interest expenses, leading to potential interest coverage difficulties and increased financial risk.

This negative trend persisted, with the ratio remaining negative through December 2023 and into mid-2024, reaching as low as -6.18, which underscores a significant impairment in earnings capacity relative to debt obligations. Interestingly, a brief recovery is observed in March 2025, when the ratio improves to 0.50 and then to 1.60 in June 2025, signaling a possible uptick in earnings or a reduction in interest expenses, thus temporarily restoring the company's ability to meet its interest obligations.

Overall, the data indicates that Paramount Skydance Corporation experienced a substantial deterioration in its interest coverage over the observed periods, shifting from comfortably covered interest expenses to periods of significant undercoverage and insolvency risk, with a tentative reversal appearing in mid-2025.