Warner Music Group (WMG)
Interest coverage
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 823,000 | 790,000 | 714,000 | 609,000 | -229,000 |
| Interest expense | US$ in thousands | 182,000 | 157,000 | 125,000 | 119,000 | 127,000 |
| Interest coverage | 4.52 | 5.03 | 5.71 | 5.12 | -1.80 |
September 30, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $823,000K ÷ $182,000K
= 4.52
Warner Music Group's interest coverage ratio has shown a decreasing trend over the past five years, from 5.71 in 2022 to 4.52 in 2024. This indicates that the company's ability to cover its interest expenses with operating income has slightly weakened. However, the ratio has remained above 1, indicating that Warner Music Group has been able to comfortably meet its interest obligations from its operating profits. The negative interest coverage ratio of -1.80 in 2020 suggests that the company's operating income was insufficient to cover its interest expenses during that period, which may have raised concerns about its financial stability. Overall, while there has been a slight decline in interest coverage over the years, Warner Music Group's ability to meet its interest obligations with operating income remains satisfactory.
Peer comparison
Sep 30, 2024