Stock Analysis on Net

Activision Blizzard Inc. (NASDAQ:ATVI)

This company has been moved to the archive! The financial data has not been updated since July 31, 2023.

Analysis of Solvency Ratios 
Quarterly Data

Microsoft Excel

Solvency Ratios (Summary)

Activision Blizzard Inc., solvency ratios (quarterly data)

Microsoft Excel
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 Dec 31, 2018 Sep 30, 2018 Jun 30, 2018 Mar 31, 2018
Debt Ratios
Debt to equity 0.17 0.18 0.19 0.19 0.20 0.20 0.21 0.21 0.22 0.24 0.24 0.25 0.20 0.21 0.21 0.22 0.22 0.23 0.24 0.25 0.42 0.45
Debt to capital 0.15 0.15 0.16 0.16 0.17 0.17 0.17 0.18 0.18 0.19 0.19 0.20 0.16 0.17 0.17 0.18 0.18 0.19 0.19 0.20 0.30 0.31
Debt to assets 0.13 0.13 0.13 0.14 0.14 0.14 0.14 0.15 0.15 0.15 0.16 0.17 0.13 0.14 0.13 0.15 0.15 0.15 0.15 0.16 0.24 0.24
Financial leverage 1.37 1.36 1.42 1.36 1.37 1.40 1.42 1.41 1.45 1.53 1.54 1.50 1.48 1.51 1.55 1.46 1.46 1.55 1.57 1.57 1.74 1.87
Coverage Ratios
Interest coverage 24.86 21.13 17.15 36.63 41.43 107.07

Based on: 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).


Debt to Equity Ratio
The debt to equity ratio shows a consistent downward trend over the analyzed period. Starting at 0.45 in the first quarter of 2018, it steadily declines to 0.17 by the second quarter of 2023. This indicates a gradual reduction in reliance on debt relative to equity, reflecting a strengthening equity base or a deliberate reduction in debt levels.
Debt to Capital Ratio
Similar to the debt to equity ratio, the debt to capital ratio declines over time. Beginning at 0.31 in early 2018, the ratio decreases steadily to 0.15 in mid-2023. This trend suggests improved capital structure management with less proportionate debt financing in the company’s capital mix.
Debt to Assets Ratio
This ratio decreases from 0.24 in the first quarter of 2018 to 0.13 by the second quarter of 2023. The reduction points to a decreasing proportion of assets financed through debt, implying a stronger asset base or less leveraged asset acquisition strategy.
Financial Leverage Ratio
The financial leverage ratio declines moderately from 1.87 in early 2018 to around 1.37 in the second quarter of 2023. After some fluctuations, the general decrease suggests less dependency on debt-related financial leverage, which could indicate lower financial risk.
Interest Coverage Ratio
Interest coverage data is only available from late 2022 onward. Starting at a very high figure of 107.07, it declines to 24.86 by mid-2023, though it remains at a strong level. Despite the decrease, the company maintains a comfortable buffer to cover its interest expenses, indicating good earnings relative to debt servicing costs.

Debt Ratios


Coverage Ratios


Debt to Equity

Activision Blizzard Inc., debt to equity calculation (quarterly data)

Microsoft Excel
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 Dec 31, 2018 Sep 30, 2018 Jun 30, 2018 Mar 31, 2018
Selected Financial Data (US$ in millions)
Long-term debt, net 3,612 3,611 3,611 3,610 3,609 3,608 3,608 3,607 3,606 3,606 3,605 3,604 2,676 2,675 2,675 2,674 2,673 2,672 2,671 2,670 4,394 4,392
Total debt 3,612 3,611 3,611 3,610 3,609 3,608 3,608 3,607 3,606 3,606 3,605 3,604 2,676 2,675 2,675 2,674 2,673 2,672 2,671 2,670 4,394 4,392
 
Shareholders’ equity 20,793 20,115 19,243 18,808 18,248 17,831 17,599 16,950 16,286 15,331 15,037 14,382 13,682 13,021 12,805 12,235 11,977 11,596 11,357 10,659 10,346 9,819
Solvency Ratio
Debt to equity1 0.17 0.18 0.19 0.19 0.20 0.20 0.21 0.21 0.22 0.24 0.24 0.25 0.20 0.21 0.21 0.22 0.22 0.23 0.24 0.25 0.42 0.45
Benchmarks
Debt to Equity, Competitors2
Alphabet Inc. 0.05 0.05 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.07 0.02 0.02
Comcast Corp. 1.16 1.16 1.17 1.15 1.02 1.00 0.99 1.01 1.04 1.12 1.15 1.21 1.25 1.27
Meta Platforms Inc. 0.14 0.08 0.08 0.08 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Netflix Inc. 0.63 0.66 0.69 0.68 0.75 0.83 0.97 1.01 1.13 1.21 1.47 1.55 1.69 1.74
Take-Two Interactive Software Inc. 0.35 0.34 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Walt Disney Co. 0.50 0.50 0.51 0.56 0.57 0.60 0.61 0.64 0.66 0.69 0.70 0.75 0.61 0.54 0.53 0.64 0.63 0.41

Based on: 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).

1 Q2 2023 Calculation
Debt to equity = Total debt ÷ Shareholders’ equity
= 3,612 ÷ 20,793 = 0.17

2 Click competitor name to see calculations.


The financial data reveals several notable trends in the company's capital structure over the observed quarters.

Total Debt
The total debt remained relatively stable until mid-2019, fluctuating slightly around 2,670 to 2,675 million US dollars. Beginning in the third quarter of 2020, there was a marked increase in total debt, rising to 3,604 million US dollars, which then plateaued and remained just above 3,600 million US dollars for the subsequent periods through mid-2023.
Shareholders’ Equity
Shareholders’ equity demonstrated a consistent upward trend throughout the entire period. Starting at 9,819 million US dollars in the first quarter of 2018, equity increased almost steadily every quarter, reaching approximately 20,793 million US dollars by mid-2023, nearly doubling over the five-and-a-half-year span. This growth reflects a strengthening equity base and potentially retained earnings or capital injections.
Debt to Equity Ratio
The ratio of debt to equity showed a steady decline over the period. Beginning at 0.45 in early 2018, it progressively decreased, reflecting the relative increase in shareholders’ equity compared to debt levels. The ratio dropped to approximately 0.17 by mid-2023, suggesting improved financial leverage and a lower risk profile in terms of indebtedness relative to equity.

Overall, the data indicates that the company has managed to grow its equity base significantly while keeping its debt levels under control with a moderate rise in absolute terms only after 2020. The declining debt-to-equity ratio underscores improved financial stability and suggests a conservative approach to leveraging. Such trends may positively influence the company's creditworthiness and investor confidence.


Debt to Capital

Activision Blizzard Inc., debt to capital calculation (quarterly data)

Microsoft Excel
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 Dec 31, 2018 Sep 30, 2018 Jun 30, 2018 Mar 31, 2018
Selected Financial Data (US$ in millions)
Long-term debt, net 3,612 3,611 3,611 3,610 3,609 3,608 3,608 3,607 3,606 3,606 3,605 3,604 2,676 2,675 2,675 2,674 2,673 2,672 2,671 2,670 4,394 4,392
Total debt 3,612 3,611 3,611 3,610 3,609 3,608 3,608 3,607 3,606 3,606 3,605 3,604 2,676 2,675 2,675 2,674 2,673 2,672 2,671 2,670 4,394 4,392
Shareholders’ equity 20,793 20,115 19,243 18,808 18,248 17,831 17,599 16,950 16,286 15,331 15,037 14,382 13,682 13,021 12,805 12,235 11,977 11,596 11,357 10,659 10,346 9,819
Total capital 24,405 23,726 22,854 22,418 21,857 21,439 21,207 20,557 19,892 18,937 18,642 17,986 16,358 15,696 15,480 14,909 14,650 14,268 14,028 13,329 14,740 14,211
Solvency Ratio
Debt to capital1 0.15 0.15 0.16 0.16 0.17 0.17 0.17 0.18 0.18 0.19 0.19 0.20 0.16 0.17 0.17 0.18 0.18 0.19 0.19 0.20 0.30 0.31
Benchmarks
Debt to Capital, Competitors2
Alphabet Inc. 0.05 0.05 0.05 0.05 0.05 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.02 0.02
Comcast Corp. 0.54 0.54 0.54 0.54 0.51 0.50 0.50 0.50 0.51 0.53 0.53 0.55 0.56 0.56
Meta Platforms Inc. 0.12 0.07 0.07 0.07 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Netflix Inc. 0.39 0.40 0.41 0.40 0.43 0.45 0.49 0.50 0.53 0.55 0.60 0.61 0.63 0.64
Take-Two Interactive Software Inc. 0.26 0.25 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Walt Disney Co. 0.33 0.33 0.34 0.36 0.36 0.38 0.38 0.39 0.40 0.41 0.41 0.43 0.38 0.35 0.35 0.39 0.39 0.29

Based on: 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).

1 Q2 2023 Calculation
Debt to capital = Total debt ÷ Total capital
= 3,612 ÷ 24,405 = 0.15

2 Click competitor name to see calculations.


The analysis of the financial data reveals several notable trends regarding the company's capital structure over the examined periods.

Total Debt
The total debt experienced a significant decrease from $4,392 million in March 2018 to $2,670 million by September 2018, maintaining a relatively stable level around $2,670 million through June 2020. Subsequently, there is an observed increase starting in September 2020, rising to approximately $3,612 million by June 2023. This reflects a shift from a period of debt reduction and stability to gradual debt accumulation over the last few years.
Total Capital
Total capital shows an overall increasing trend throughout the timeframe. It fluctuated somewhat between $13,329 million and $15,480 million from September 2018 to December 2019, then experienced consistent growth reaching $24,405 million by June 2023. This steady increase indicates expansion or reinvestment activities contributing to a larger capital base.
Debt to Capital Ratio
The ratio declined sharply from 0.31 in March 2018 to 0.16 in June 2020, coinciding with the reduction in total debt and incremental capital growth. Following this, although debt increased after mid-2020, the ratio remained relatively stable, fluctuating between 0.15 and 0.20, and ultimately declining to 0.15 by June 2023. This suggests that the growth in total capital has generally outpaced the increase in debt, maintaining a conservative leverage profile.

In summary, while total debt decreased substantially early in the period, it began to rise moderately from late 2020 onward. Concurrently, total capital expanded steadily, resulting in a lowering debt to capital ratio over time. This overall pattern reflects a strengthening capital structure with controlled leverage, potentially indicative of strategic financial management aimed at balancing growth and risk.


Debt to Assets

Activision Blizzard Inc., debt to assets calculation (quarterly data)

Microsoft Excel
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 Dec 31, 2018 Sep 30, 2018 Jun 30, 2018 Mar 31, 2018
Selected Financial Data (US$ in millions)
Long-term debt, net 3,612 3,611 3,611 3,610 3,609 3,608 3,608 3,607 3,606 3,606 3,605 3,604 2,676 2,675 2,675 2,674 2,673 2,672 2,671 2,670 4,394 4,392
Total debt 3,612 3,611 3,611 3,610 3,609 3,608 3,608 3,607 3,606 3,606 3,605 3,604 2,676 2,675 2,675 2,674 2,673 2,672 2,671 2,670 4,394 4,392
 
Total assets 28,518 27,393 27,383 25,620 24,994 25,012 25,056 23,977 23,572 23,425 23,109 21,577 20,220 19,604 19,845 17,805 17,495 17,948 17,835 16,713 17,958 18,397
Solvency Ratio
Debt to assets1 0.13 0.13 0.13 0.14 0.14 0.14 0.14 0.15 0.15 0.15 0.16 0.17 0.13 0.14 0.13 0.15 0.15 0.15 0.15 0.16 0.24 0.24
Benchmarks
Debt to Assets, Competitors2
Alphabet Inc. 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.05 0.01 0.02
Comcast Corp. 0.37 0.37 0.37 0.36 0.35 0.35 0.34 0.35 0.36 0.37 0.38 0.39 0.39 0.39
Meta Platforms Inc. 0.09 0.05 0.05 0.06 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Netflix Inc. 0.28 0.29 0.30 0.29 0.31 0.32 0.35 0.36 0.38 0.39 0.42 0.42 0.42 0.42
Take-Two Interactive Software Inc. 0.19 0.19 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Walt Disney Co. 0.24 0.24 0.24 0.25 0.26 0.27 0.27 0.28 0.28 0.29 0.29 0.31 0.27 0.24 0.24 0.28 0.27 0.21

Based on: 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).

1 Q2 2023 Calculation
Debt to assets = Total debt ÷ Total assets
= 3,612 ÷ 28,518 = 0.13

2 Click competitor name to see calculations.


Total Debt
The total debt level remained relatively stable from March 2018 through June 2020, fluctuating slightly around the 2,600 to 4,400 million US$ range. A notable increase occurred between June and September 2020, where total debt rose from 2,676 million US$ to 3,604 million US$, after which it stabilized around 3,600 million US$ through mid-2023. This suggests a marked increase in borrowing or debt issuance in late 2020, followed by maintenance of this higher debt level.
Total Assets
The total assets showed a general upward trend over the entire period. Starting at 18,397 million US$ in March 2018, assets declined somewhat until September 2018 but then increased steadily, reaching a peak of 28,518 million US$ by June 2023. This reflects an overall growth in asset base, with intermittent more rapid expansions notably from 2020 onwards.
Debt to Assets Ratio
The debt to assets ratio exhibited a downward trend from 0.24 in early 2018 to approximately 0.13 by mid-2023. This decline reflects the faster growth of total assets relative to total debt. Although there was a slight uptick in the ratio around late 2020 corresponding with the increase in debt, the ratio resumed its general decline afterwards, indicating improving leverage or a stronger asset base relative to debt obligations over time.

Financial Leverage

Activision Blizzard Inc., financial leverage calculation (quarterly data)

Microsoft Excel
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 Dec 31, 2018 Sep 30, 2018 Jun 30, 2018 Mar 31, 2018
Selected Financial Data (US$ in millions)
Total assets 28,518 27,393 27,383 25,620 24,994 25,012 25,056 23,977 23,572 23,425 23,109 21,577 20,220 19,604 19,845 17,805 17,495 17,948 17,835 16,713 17,958 18,397
Shareholders’ equity 20,793 20,115 19,243 18,808 18,248 17,831 17,599 16,950 16,286 15,331 15,037 14,382 13,682 13,021 12,805 12,235 11,977 11,596 11,357 10,659 10,346 9,819
Solvency Ratio
Financial leverage1 1.37 1.36 1.42 1.36 1.37 1.40 1.42 1.41 1.45 1.53 1.54 1.50 1.48 1.51 1.55 1.46 1.46 1.55 1.57 1.57 1.74 1.87
Benchmarks
Financial Leverage, Competitors2
Alphabet Inc. 1.43 1.42 1.43 1.41 1.39 1.41 1.43 1.42 1.41 1.42 1.44 1.41 1.34 1.34
Comcast Corp. 3.12 3.15 3.18 3.17 2.92 2.89 2.87 2.89 2.92 3.01 3.03 3.12 3.18 3.22
Meta Platforms Inc. 1.54 1.48 1.48 1.44 1.35 1.33 1.33 1.27 1.23 1.22 1.24 1.24 1.26 1.31
Netflix Inc. 2.23 2.27 2.34 2.32 2.43 2.58 2.81 2.79 2.96 3.11 3.55 3.74 3.98 4.17
Take-Two Interactive Software Inc. 1.85 1.84 1.72 1.73 1.91 1.74 1.81 1.89 2.01 2.03 1.95 2.03 2.21 2.09
Walt Disney Co. 2.09 2.10 2.14 2.21 2.23 2.26 2.30 2.33 2.34 2.40 2.41 2.42 2.28 2.24 2.18 2.32 2.38 1.99

Based on: 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).

1 Q2 2023 Calculation
Financial leverage = Total assets ÷ Shareholders’ equity
= 28,518 ÷ 20,793 = 1.37

2 Click competitor name to see calculations.


The analysis of the quarterly financial data reveals several notable trends in the company's asset base, equity, and financial leverage over the observed period.

Total Assets
Total assets displayed some fluctuations from early 2018 through mid-2019, initially decreasing from approximately $18.4 billion to about $16.7 billion before gradually increasing again towards the end of 2019. From 2020 onward, assets followed a generally upward trajectory, rising from around $19.6 billion at the start of 2020 to approximately $28.5 billion by mid-2023. This reflects a steady asset base growth, indicating possible expansions or acquisitions supporting the company’s operational scale.
Shareholders’ Equity
Shareholders’ equity consistently increased throughout the entire period. Starting near $9.8 billion in early 2018, it rose steadily each quarter, reaching roughly $20.8 billion by mid-2023. The consistent increase in equity signifies strengthening financial health and accumulated retained earnings or capital injections over time, contributing to an enhanced equity position relative to liabilities.
Financial Leverage
The financial leverage ratio, which measures the proportion of total assets funded by shareholders' equity, showed a declining trend from 1.87 in the first quarter of 2018 to a range of approximately 1.36-1.42 in subsequent years. After mid-2019, the ratio stabilized around this lower range with minor fluctuations. This decline suggests reduced reliance on debt financing and a more conservative capital structure with increased equity financing relative to total assets.

Overall, the data depict a company that has grown its asset base substantially while simultaneously increasing shareholders’ equity at a steady pace. The reduction and stabilization of financial leverage ratios imply an improving balance sheet with a lower risk profile, reflecting careful management of debt and equity components.


Interest Coverage

Activision Blizzard Inc., interest coverage calculation (quarterly data)

Microsoft Excel
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 Dec 31, 2018 Sep 30, 2018 Jun 30, 2018 Mar 31, 2018
Selected Financial Data (US$ in millions)
Net income 587 740 403 435 280 395 565 639 876 619 508 604 580 505 524 204 328 447 651 260 402 500
Add: Income tax expense 137 155 55 65 41 70 73 120 126 146 55 118 147 99 (77) 45 42 120 39 (48) 6 67
Add: Interest expense from debt 27 27 54 27 27
Earnings before interest and tax (EBIT) 751 922 512 500 348 492 638 759 1,002 765 563 722 727 604 447 249 370 567 690 212 408 567
Solvency Ratio
Interest coverage1 24.86 21.13 17.15 36.63 41.43 107.07
Benchmarks
Interest Coverage, Competitors2
Comcast Corp. 3.79 3.50 3.38 3.35 5.43 5.57 5.46 5.67 4.94 4.54 4.07
Netflix Inc. 7.95 7.86 8.45 8.97 8.83 8.62 8.63 8.49 7.41 6.71 5.17

Based on: 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).

1 Q2 2023 Calculation
Interest coverage = (EBITQ2 2023 + EBITQ1 2023 + EBITQ4 2022 + EBITQ3 2022) ÷ (Interest expenseQ2 2023 + Interest expenseQ1 2023 + Interest expenseQ4 2022 + Interest expenseQ3 2022)
= (751 + 922 + 512 + 500) ÷ (27 + 27 + 54 + 0) = 24.86

2 Click competitor name to see calculations.


Earnings before interest and tax (EBIT)
The EBIT values exhibit considerable quarterly fluctuations across the observed period. Initially, from March 2018 to December 2018, EBIT varied significantly, with a low of 212 million USD in September 2018 and a peak of 690 million USD in December 2018. The following year, 2019, showed a general decline in quarters two and three to 370 million and 249 million USD respectively, before rebounding to 447 million USD in the fourth quarter. In 2020, EBIT improved substantially, ranging from 563 million USD in the first quarter to a peak of 727 million USD in the third quarter, but decreased to 722 million USD by year-end. During 2021, EBIT values increased notably, reaching the highest point of 1,002 million USD in December. However, beginning 2022, EBIT declined steadily to reach 348 million USD in the third quarter, followed by a recovery toward year-end. In the first two quarters of 2023, EBIT showed volatility with 512 million USD in March and peaking again at 922 million USD in June.
Interest expense from debt
Interest expense data is largely absent across most quarters until mid-2022, when it consistently recorded values of 27 million USD in multiple quarters, except for a spike to 54 million USD in the fourth quarter of 2022. The data indicates that interest payments became more evident or were reported more consistently starting in 2022.
Interest coverage ratio
Interest coverage ratios, calculated as EBIT divided by interest expense, are only present from the third quarter of 2022 onward. The ratios begin at a very high value of 107.07, suggesting strong ability to cover interest expenses at that time. Subsequent quarters show a decreasing trend in coverage ratio, dipping to 17.15 at the end of 2022 before recovering moderately to 24.86 by the second quarter of 2023. This pattern implies that while the company maintained a satisfactory capacity to service interest, the margin narrowed during late 2022.
Overall observations
The financial data reveals cyclical patterns in EBIT, with peaks frequently occurring near year-ends, particularly pronounced in 2018, 2020, and 2021. Interest expense trends suggest new or increased debt obligations starting in 2022, concurrent with a lower interest coverage ratio, indicating increased leverage or financial costs. Despite this, the company’s ability to service its interest obligations remains robust, albeit with some volatility. The spike in interest expense in the fourth quarter of 2022 and corresponding dip in coverage ratio warrants monitoring for potential impacts on financial flexibility.