Take-Two Interactive Software Inc (TTWO)

Interest coverage

		Mar 31, 2025	Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021
Earnings before interest and tax (EBIT)	US$ in thousands	-4,491,300	-1,339,600	-1,208,500	484,026	684,023
Interest expense	US$ in thousands	—	140,600	203,900	24,545	6,207
Interest coverage		—	-9.53	-5.93	19.72	110.20

March 31, 2025 calculation

Interest coverage = EBIT ÷ Interest expense
= $-4,491,300K ÷ $—K
= —

The interest coverage ratio is a measure of a company's ability to cover its interest expense with its earnings before interest and taxes (EBIT). For Take-Two Interactive Software Inc, the interest coverage ratio has fluctuated over the years as follows:

1. As of March 31, 2021, the interest coverage ratio was 110.20, indicating that the company had strong earnings relative to its interest expenses, which suggests a healthy financial position in terms of debt servicing capability.

2. By March 31, 2022, the interest coverage ratio had declined to 19.72. While this ratio still indicates the company's ability to cover its interest payments from its earnings, the decrease suggests that the company's profitability may have decreased or its interest expenses may have increased compared to the previous year.

3. However, as of March 31, 2023, the interest coverage ratio turned negative at -5.93. A negative interest coverage ratio means that the company's EBIT is insufficient to cover its interest expenses, raising concerns about its ability to meet its debt obligations solely based on operating income.

4. The situation worsened by March 31, 2024, with an interest coverage ratio of -24.73, indicating a significant deterioration in the company's ability to cover its interest expenses. This suggests increasing financial distress and the potential need for refinancing or other measures to address the shortfall.

5. Unfortunately, the data for March 31, 2025, is unavailable (represented as "—"), making it impossible to provide further analysis for that year. The lack of data hinders a comprehensive understanding of the company's recent financial position in terms of interest coverage.

In summary, Take-Two Interactive Software Inc's interest coverage ratio has shown fluctuations over the years, transitioning from a strong position to a concerning negative trend, highlighting potential challenges in meeting its interest obligations from operating income alone. Further examination and context are needed to assess the company's long-term financial health and sustainability in managing its debt burden.