Warner Bros Discovery Inc (WBD)

Interest coverage

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Earnings before interest and tax (EBIT) US$ in thousands -13,405,000 -1,601,000 -7,152,000 2,073,000 2,420,000
Interest expense US$ in thousands 2,017,000 2,221,000 1,777,000 633,000 648,000
Interest coverage -6.65 -0.72 -4.02 3.27 3.73

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $-13,405,000K ÷ $2,017,000K
= -6.65

To analyze Warner Bros Discovery Inc's interest coverage, we observe the trend over the years based on the provided data:

1. On December 31, 2020, the interest coverage ratio was 3.73, indicating that the company generated enough operating income to cover its interest obligations comfortably.

2. By December 31, 2021, the interest coverage ratio decreased to 3.27, suggesting a slight decline in the company's ability to cover its interest expenses, although it still remained at an acceptable level.

3. However, a significant deterioration was seen by December 31, 2022, where the interest coverage ratio dropped sharply to -4.02. This negative ratio implies that the company's operating income was insufficient to cover its interest payments, raising concerns about its financial health.

4. The situation worsened further by December 31, 2023, with an interest coverage ratio of -0.72, indicating a continued inability to meet interest obligations from operating income.

5. The downward trend continued into December 31, 2024, with an interest coverage ratio of -6.65, reflecting a severe strain on the company's financial position as the negative ratio widened.

In conclusion, Warner Bros Discovery Inc experienced a concerning decline in its interest coverage ratio over the years, culminating in negative ratios in the later years. This trend suggests increasing financial risk and highlights the importance of closely monitoring the company's ability to meet its interest payments in the future.


Peer comparison

Dec 31, 2024

Company name
Symbol
Interest coverage
Warner Bros Discovery Inc
WBD
-6.65
Cable One Inc
CABO
0.77
Charter Communications Inc
CHTR
385.82
Comcast Corp
CMCSA
5.64

See also:

Warner Bros Discovery Inc Interest Coverage