Warner Bros Discovery Inc (WBD)

Interest coverage

		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	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	-1,689,000	-3,575,000	-5,926,000	-8,743,000	-7,257,000	-4,968,000	-2,298,000	2,276,000	1,875,000	2,123,000	2,222,000	1,979,000	2,240,000	2,398,000	2,520,000	2,769,000	2,818,000	2,763,000	2,536,000	2,234,000
Interest expense (ttm)	US$ in thousands	2,221,000	2,277,000	2,258,000	2,195,000	1,777,000	1,373,000	977,000	623,000	633,000	642,000	644,000	648,000	648,000	647,000	649,000	649,000	668,000	677,000	699,000	734,000
Interest coverage		-0.76	-1.57	-2.62	-3.98	-4.08	-3.62	-2.35	3.65	2.96	3.31	3.45	3.05	3.46	3.71	3.88	4.27	4.22	4.08	3.63	3.04

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-1,689,000K ÷ $2,221,000K
= -0.76

Warner Bros. Discovery Inc's interest coverage ratio has been fluctuating over the past eight quarters. The interest coverage ratio measures the company's ability to cover its interest expenses with its earnings before interest and taxes (EBIT). A ratio below 1 indicates that the company is not generating enough operating income to cover its interest expenses, which can be a sign of financial distress.

The data shows that Warner Bros. Discovery Inc's interest coverage ratio has been consistently below 1 in the last eight quarters. This indicates that the company has not been able to generate sufficient EBIT to cover its interest expenses during this period. The downward trend in the interest coverage ratio from Q1 2022 to Q4 2023 is concerning, as it implies a worsening ability to meet interest obligations.

Overall, Warner Bros. Discovery Inc's low and declining interest coverage ratio raises red flags about its financial stability and ability to service its debt obligations. Further analysis of the company's financial health and strategies to improve its profitability and cash flow may be necessary to address these challenges.