Wynn Resorts Limited (WYNN)

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	984,669	787,081	741,712	467,477	236,361	-7,854	-46,398	-52,143	-149,750	-242,297	-433,163	-876,323	-946,100	-628,927	-292,409	316,699	713,846	709,190	823,529	873,781
Interest expense (ttm)	US$ in thousands	751,509	745,174	721,880	686,467	650,885	624,226	609,274	604,868	605,562	602,888	597,705	580,499	556,474	520,236	489,746	449,677	414,030	401,698	380,053	376,802
Interest coverage		1.31	1.06	1.03	0.68	0.36	-0.01	-0.08	-0.09	-0.25	-0.40	-0.72	-1.51	-1.70	-1.21	-0.60	0.70	1.72	1.77	2.17	2.32

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $984,669K ÷ $751,509K
= 1.31

Interest coverage ratio is a financial metric used to evaluate a company's ability to cover its interest payments on outstanding debt with its earnings before interest and taxes (EBIT). A higher interest coverage ratio indicates a greater capacity to meet interest obligations.

Analyzing the interest coverage ratio of Wynn Resorts Ltd. based on the provided data reveals fluctuations over the last eight quarters. In Q4 2023, the interest coverage ratio improved to 1.62, indicating that the company's earnings were 1.62 times larger than its interest expenses for that quarter. This suggests a strengthened ability to cover interest payments.

However, in the previous quarters, the interest coverage ratio was below 1, suggesting that the company's earnings were insufficient to cover its interest obligations. Particularly in Q1 2023, the interest coverage ratio was negative at -0.03, indicating that Wynn Resorts' earnings were insufficient to cover its interest expenses for that quarter.

The trend of fluctuating interest coverage ratios raises concerns about the company's ability to meet its interest payments consistently over time. Investors and creditors may view low or negative interest coverage ratios as a sign of financial distress or a higher risk of default.

Overall, Wynn Resorts Ltd. needs to improve its interest coverage ratio by either increasing its EBIT or reducing its interest expenses to strengthen its financial position and mitigate the risk associated with its debt obligations.