Take-Two Interactive Software Inc (TTWO)

Interest coverage

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	-3,590,600	-1,165,200	473,600	629,400	425,267
Interest expense	US$ in thousands	132,000	108,600	6,525	6,207	38,505
Interest coverage		-27.20	-10.73	72.58	101.40	11.04

March 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $-3,590,600K ÷ $132,000K
= -27.20

The interest coverage ratio for Take-Two Interactive Software Inc has fluctuated significantly over the past five years. In March 2020, the interest coverage ratio was 11.04, indicating that the company's operating income was able to cover its interest expenses 11.04 times. This was a positive sign of the company's ability to meet its interest obligations comfortably.

However, the interest coverage ratio deteriorated in the following year, dropping to 101.40 in March 2021. This sharp increase in coverage was a strong indicator of the company's enhanced ability to cover its interest payments.

Subsequently, in March 2022, the interest coverage ratio surged to 72.58, still reflecting a strong ability to meet interest expenses. However, there was a sharp decline in the interest coverage ratio to -10.73 in March 2023, indicating that the company's operating income was insufficient to cover its interest expenses.

The interest coverage ratio deteriorated even further in March 2024, plunging to -27.20. This negative ratio suggests that Take-Two Interactive Software Inc's operating income was insufficient to cover its interest expenses, raising concerns about the company's financial health and ability to service its debts.