Wynn Resorts Limited (WYNN)

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	1,132,730	984,669	236,361	-149,750	-946,100
Interest expense	US$ in thousands	23,000	751,509	650,885	605,562	556,474
Interest coverage		49.25	1.31	0.36	-0.25	-1.70

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $1,132,730K ÷ $23,000K
= 49.25

The interest coverage ratio for Wynn Resorts Limited has shown a fluctuating trend over the past five years. As of December 31, 2020, the interest coverage was at a concerning level of -1.70, indicating that the company's earnings were insufficient to cover its interest expenses. This implies a potential risk for insolvency.

By the end of December 31, 2021, the interest coverage ratio deteriorated further to -0.25, exacerbating the company's financial vulnerability. However, there was a significant improvement by December 31, 2022, with the ratio increasing to 0.36, though still below the ideal level of 1. This suggests that the company's ability to service its interest payments started to show a modest recovery.

In the subsequent years, there was a more substantial enhancement in the interest coverage ratio. By December 31, 2023, the ratio had improved to 1.31, moving to a positive territory for the first time in the period under review. This indicates that the company's earnings were now sufficient to cover its interest obligations, signaling a positive shift in its financial health.

Remarkably, by December 31, 2024, the interest coverage ratio surged to 49.25, reflecting a significant strengthening of the company's ability to meet its interest expenses comfortably. This remarkable improvement suggests that Wynn Resorts Limited has made substantial progress in generating earnings to support its interest payments, potentially indicating enhanced financial stability and performance.