Take-Two Interactive Software Inc (TTWO)
Interest coverage
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 | Jun 30, 2020 | ||
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Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | -4,422,900 | -3,249,600 | -3,250,100 | -3,033,400 | -3,049,400 | -1,117,900 | -1,162,000 | -1,328,700 | -1,162,600 | -335,258 | 3,317 | 279,264 | 489,708 | 617,544 | 587,881 | 642,677 | 540,299 | 406,855 | 459,619 | 466,950 |
Interest expense (ttm) | US$ in thousands | 74,700 | 74,700 | 64,600 | 69,800 | 80,100 | 102,700 | 116,500 | 135,900 | 130,700 | 108,405 | 80,105 | 29,605 | 1,332 | 9,245 | 9,245 | 9,245 | 16,436 | 10,855 | 10,937 | 18,991 |
Interest coverage | -59.21 | -43.50 | -50.31 | -43.46 | -38.07 | -10.89 | -9.97 | -9.78 | -8.90 | -3.09 | 0.04 | 9.43 | 367.65 | 66.80 | 63.59 | 69.52 | 32.87 | 37.48 | 42.02 | 24.59 |
March 31, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-4,422,900K ÷ $74,700K
= -59.21
Take-Two Interactive Software Inc's interest coverage ratio has been fluctuating over the years. The interest coverage ratio measures the company's ability to pay its interest expenses on outstanding debt. From June 30, 2020, to June 30, 2022, the company's interest coverage ratio was quite healthy, ranging from 24.59 to 9.43. However, starting from September 30, 2022, the interest coverage ratio dropped significantly and became negative, indicating that the company's operating income was not sufficient to cover its interest expenses.
The negative interest coverage ratios from September 30, 2022, to March 31, 2025, suggest that Take-Two Interactive Software Inc was facing challenges in meeting its interest obligations with its current level of operating income. A negative interest coverage ratio is a red flag for investors and creditors as it indicates financial distress and the potential risk of default on debt payments.
The declining trend in the interest coverage ratio over the years may raise concerns about the company's financial stability and ability to manage its debt effectively. It will be crucial for the company to focus on improving its operating performance and addressing its debt levels to ensure long-term financial sustainability.
Peer comparison
Mar 31, 2025