Warner Music Group (WMG)
Interest coverage
| 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 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 874,000 | 879,000 | 790,000 | 741,000 | 698,000 | 740,000 | 714,000 | 651,000 | 667,000 | 652,000 | 609,000 | 597,000 | 2,000 | -198,000 | -229,000 | -288,000 | 203,000 | 374,000 | 356,000 | 343,000 |
| Interest expense (ttm) | US$ in thousands | 174,000 | 166,000 | 158,000 | 148,000 | 139,000 | 133,000 | 125,000 | 122,000 | 120,000 | 120,000 | 122,000 | 122,000 | 124,000 | 125,000 | 127,000 | 132,000 | 136,000 | 139,000 | 142,000 | 141,000 |
| Interest coverage | 5.02 | 5.30 | 5.00 | 5.01 | 5.02 | 5.56 | 5.71 | 5.34 | 5.56 | 5.43 | 4.99 | 4.89 | 0.02 | -1.58 | -1.80 | -2.18 | 1.49 | 2.69 | 2.51 | 2.43 |
March 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $874,000K ÷ $174,000K
= 5.02
Warner Music Group's interest coverage ratio has shown consistent improvement in recent quarters. The company's interest coverage ratio has been above 5 for the past several quarters, indicating that Warner Music Group has ample earnings to cover its interest expenses. This suggests that the company is in a strong financial position and has the ability to meet its interest obligations comfortably.
However, there was a significant drop in the interest coverage ratio in the first and second quarters of 2021, with the ratio falling close to zero and even becoming negative. This could be a cause for concern as it indicates that the company's earnings may not be sufficient to cover its interest expenses during those periods.
Overall, Warner Music Group's interest coverage ratio has generally been healthy, but management should closely monitor any fluctuations in the ratio to ensure the company's financial stability in the long term.
Peer comparison
Mar 31, 2024