Analysis of Solvency Ratios
Quarterly Data
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
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- Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Reportable Segments
- Common Stock Valuation Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Capital Asset Pricing Model (CAPM)
- Return on Equity (ROE) since 2005
- Price to Earnings (P/E) since 2005
- Price to Operating Profit (P/OP) since 2005
- Analysis of Debt
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Solvency Ratios (Summary)
Las Vegas Sands Corp., solvency ratios (quarterly data)
Based on: 10-Q (reporting date: 2023-09-30), 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).
The financial ratios over the analyzed periods reveal distinct trends in leverage and solvency metrics. The data shows changes that reflect the company’s evolving financial structure and ability to cover interest expenses.
- Debt to Equity Ratio
- This ratio exhibits a rising trend from the first quarter of 2019 through the end of 2021, increasing from approximately 2.17 to a peak near 7.41. This indicates a growing reliance on debt financing relative to equity. However, starting in early 2022, the ratio declines steadily to around 3.16 by the third quarter of 2023, signaling a partial deleveraging or equity improvement in the capital structure.
- Debt to Capital Ratio
- The debt to capital ratio follows a similar trend with gradual increases from about 0.68 in early 2019 reaching a maximum near 0.88 at the end of 2021, suggesting increased leverage. From 2022 onwards, it decreases moderately to approximately 0.76 by the third quarter of 2023, corroborating the reduction in debt dependency observed in the debt to equity ratio.
- Debt to Assets Ratio
- The debt to assets ratio increases from around 0.54 in early 2019 to about 0.74 by late 2021, indicating a rising proportion of assets financed with debt. This ratio also declines from 2022, reaching nearly 0.65 by mid-2023, which aligns with the deleveraging trend observed in other debt-related measures.
- Financial Leverage
- This ratio steadily increases from 4.04 in early 2019 to a high of 10.05 at the end of 2021, implying that assets were financed increasingly through debt or less equity. Subsequently, from the beginning of 2022, the financial leverage ratio decreases to about 4.86 by the third quarter of 2023, reinforcing the evidence of reduced financial risk exposure.
- Interest Coverage Ratio
- The interest coverage ratio shows a notable weakening during the 2020 to 2021 period, moving from a healthy coverage of over 7 in early 2019 down to negative values around -3.3 by late 2020 and through 2021. This decline indicates the company’s earnings before interest and taxes were insufficient to meet interest expenses during those intervals. From 2022 onwards, a gradual recovery is observed with the ratio improving to slightly positive values above 2 by the third quarter of 2023, suggesting improved earnings capacity relative to interest payments.
Overall, the company experienced increased leverage and financial risk up until late 2021, culminating in significant difficulties covering interest costs. Since early 2022, the financial metrics demonstrate a trend toward deleveraging and improved interest coverage, which could imply strategic efforts to strengthen solvency and reduce financial risk exposure going forward.
Debt Ratios
Coverage Ratios
Debt to Equity
Las Vegas Sands Corp., debt to equity calculation (quarterly data)
| 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Current maturities of long-term debt | |||||||||||||||||||||||||
| Long-term debt, excluding current maturities | |||||||||||||||||||||||||
| Total debt | |||||||||||||||||||||||||
| Total Las Vegas Sands Corp. stockholders’ equity | |||||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||||
| Debt to equity1 | |||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||
| Debt to Equity, Competitors2 | |||||||||||||||||||||||||
| Airbnb Inc. | |||||||||||||||||||||||||
| Booking Holdings Inc. | |||||||||||||||||||||||||
| Chipotle Mexican Grill Inc. | |||||||||||||||||||||||||
| DoorDash, Inc. | |||||||||||||||||||||||||
| McDonald’s Corp. | |||||||||||||||||||||||||
| Starbucks Corp. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-09-30), 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).
1 Q3 2023 Calculation
Debt to equity = Total debt ÷ Total Las Vegas Sands Corp. stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt exhibits a generally increasing trend from March 2019 through December 2022, starting around $12 billion and peaking near $16 billion around the end of 2022. A slight decline is observed thereafter through the first three quarters of 2023, decreasing from roughly $15.9 billion to approximately $14.4 billion. The increase during 2020 and 2021 is consistent, reflecting potential increased borrowing or financial obligations during this period.
- Total Stockholders’ Equity
- Stockholders’ equity shows a decreasing trend from 2019 through the end of 2021, falling from about $5.5 billion to below $2 billion. This reduction marks significant erosion of equity value over the initial part of the timeline. However, starting in early 2022, equity begins to recover noticeably, rising to over $4.5 billion by the first quarter of 2023 and continuing this upward trajectory through mid-2023. This recovery indicates a restoration of equity base which may be due to improved profitability, capital raising, or asset revaluation.
- Debt to Equity Ratio
- The debt to equity ratio increases markedly from about 2.2 in early 2019 to a peak exceeding 7.4 by December 2021, signaling a substantial rise in financial leverage and risk over this period. This ratio shows a sharp decline beginning in the first quarter of 2022, dropping to around 3.2 by September 2023. The decline corresponds with the partial reduction in total debt coupled with the substantial recovery in equity, suggesting a deleveraging phase and strengthening of the company’s financial structure during the most recent periods.
- Summary and Insights
- Overall, the data depict a period of financial stress up to the end of 2021, characterized by rising debt levels, decreasing equity, and escalating leverage. The subsequent period from early 2022 onward shows signs of financial stabilization and improvement, with equity rebounding, debt slightly reducing, and leverage ratios declining. This pattern indicates efforts toward financial recovery and improved capital structure management in the recent quarters.
Debt to Capital
Las Vegas Sands Corp., debt to capital calculation (quarterly data)
| Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Current maturities of long-term debt | |||||||||||||||||||||||||
| Long-term debt, excluding current maturities | |||||||||||||||||||||||||
| Total debt | |||||||||||||||||||||||||
| Total Las Vegas Sands Corp. stockholders’ equity | |||||||||||||||||||||||||
| Total capital | |||||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||||
| Debt to capital1 | |||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||
| Debt to Capital, Competitors2 | |||||||||||||||||||||||||
| Airbnb Inc. | |||||||||||||||||||||||||
| Booking Holdings Inc. | |||||||||||||||||||||||||
| Chipotle Mexican Grill Inc. | |||||||||||||||||||||||||
| DoorDash, Inc. | |||||||||||||||||||||||||
| McDonald’s Corp. | |||||||||||||||||||||||||
| Starbucks Corp. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-09-30), 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).
1 Q3 2023 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals the following trends and insights regarding the company’s debt and capital structure over the observed period:
- Total Debt
- The total debt showed a generally increasing trend from the first quarter of 2019 through the end of 2022, rising from approximately $12.0 billion to nearly $16.0 billion by the last quarter of 2022. This indicates a steady accumulation of debt over this period. However, in the first three quarters of 2023, total debt exhibited a slight decline, decreasing from around $15.99 billion to approximately $14.39 billion, suggesting a possible strategic reduction in debt levels during this recent period.
- Total Capital
- Total capital displayed more variability throughout the analyzed timeline. Starting at roughly $17.5 billion in early 2019, the capital amount fluctuated modestly but remained generally stable until late 2021. In 2022, there was a significant increase, with total capital peaking at over $19.8 billion by the last quarter of that year. However, similar to total debt, total capital declined somewhat in early 2023, falling to about $18.9 billion by the third quarter. This pattern suggests capital injections or revaluations occurred in 2022, followed by a partial retrenchment in capital base in 2023.
- Debt to Capital Ratio
- The debt to capital ratio reveals notable changes aligned with the trends in debt and capital. Starting at 0.68–0.69 in early 2019, this ratio climbed steadily over the following two years, peaking near 0.88 by the end of 2021. This upward trend signifies a growing reliance on debt financing relative to the overall capital structure. In 2022, the ratio decreased to the range of approximately 0.77 to 0.80, concurrent with the increase in total capital, indicating a reduction in leverage and improved capital adequacy during that period. The first three quarters of 2023 show a continued slight decline in this ratio down to roughly 0.76, consistent with the observed reduction in total debt and capital, further reflecting a moderate deleveraging effort.
In summary, the data portrays a company that progressively increased its leverage through 2021, reaching peak indebtedness relative to its capital. Subsequent quarters reveal a strategic shift, with capital injections and a concerted effort to manage and reduce debt levels, leading to improved debt to capital ratios. This pattern indicates adjustments towards a more balanced capital structure in recent periods, potentially aimed at enhancing financial stability and flexibility.
Debt to Assets
Las Vegas Sands Corp., debt to assets calculation (quarterly data)
| Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Current maturities of long-term debt | |||||||||||||||||||||||||
| Long-term debt, excluding current maturities | |||||||||||||||||||||||||
| Total debt | |||||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||||
| Debt to assets1 | |||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||
| Debt to Assets, Competitors2 | |||||||||||||||||||||||||
| Airbnb Inc. | |||||||||||||||||||||||||
| Booking Holdings Inc. | |||||||||||||||||||||||||
| Chipotle Mexican Grill Inc. | |||||||||||||||||||||||||
| DoorDash, Inc. | |||||||||||||||||||||||||
| McDonald’s Corp. | |||||||||||||||||||||||||
| Starbucks Corp. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-09-30), 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).
1 Q3 2023 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
The analysis of the recent financial figures indicates several noteworthy trends in the company's leverage and asset base over the observed periods.
- Total Debt
- The total debt figures show a gradual increase from March 2019 through December 2020, rising from approximately 12.0 billion USD to a peak near 14.0 billion USD. This upward trend continues into early 2022, reaching nearly 16.0 billion USD in December 2022. Subsequently, there is a moderate decline in debt levels through September 2023, reducing to approximately 14.4 billion USD, suggesting partial debt repayment or refinancing activities.
- Total Assets
- Total assets depict an initial slight variation around 22.3 to 23.2 billion USD between March 2019 and December 2019. The asset base then contracts notably in 2020, bottoming out near 20.8 billion USD in the latter half, before a modest recovery is observed in late 2021 and throughout 2022, reaching just above 22.7 billion USD by March 2023. In the subsequent quarters up to September 2023, total assets stabilize around the 22.1 billion USD level. This reflects some volatility, possibly reflecting market or operational impacts during the sampled periods.
- Debt to Assets Ratio
- The debt to assets ratio follows an upward trajectory from approximately 0.54 in early 2019, rising steadily to a peak of about 0.74 in December 2021. This signals increasing leverage possibly due to rising indebtedness relative to assets or contracting asset values. After this peak, the ratio declines to about 0.65 by September 2023, driven by the recent reduction in total debt coupled with relatively stable asset levels. This decrease indicates a partial improvement in the company's financial leverage and potentially a management focus on deleveraging post-2021.
Overall, the financial data highlights a period of increasing leverage through 2021, with a gradual return towards lower leverage ratios in the more recent quarters. The fluctuations in total assets could reflect changing market conditions or investment cycles, while the late reduction in total debt suggests efforts to strengthen the balance sheet.
Financial Leverage
Las Vegas Sands Corp., financial leverage calculation (quarterly data)
| 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||||
| Total Las Vegas Sands Corp. stockholders’ equity | |||||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||||
| Financial leverage1 | |||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||
| Financial Leverage, Competitors2 | |||||||||||||||||||||||||
| Airbnb Inc. | |||||||||||||||||||||||||
| Booking Holdings Inc. | |||||||||||||||||||||||||
| Chipotle Mexican Grill Inc. | |||||||||||||||||||||||||
| DoorDash, Inc. | |||||||||||||||||||||||||
| McDonald’s Corp. | |||||||||||||||||||||||||
| Starbucks Corp. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-09-30), 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).
1 Q3 2023 Calculation
Financial leverage = Total assets ÷ Total Las Vegas Sands Corp. stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
The financial data reveals notable trends in total assets, stockholders’ equity, and financial leverage over the observed periods. These trends provide insight into the financial position and structural changes within the company through different economic cycles.
- Total Assets
- Total assets generally fluctuated within the range of approximately $20.5 billion to $23.2 billion. Initially, there was a slight increase in total assets from March 2019 through December 2019, peaking at about $23.2 billion. However, starting in early 2020, total assets experienced a decline, reaching a low around $20.5 billion by the end of 2021. After this period, assets showed a recovery trend, increasing steadily through 2022 and early 2023, reaching approximately $22.7 billion by March 2023. This pattern suggests an initial contraction likely linked to adverse external conditions followed by gradual recovery and asset rebuilding efforts.
- Total Stockholders’ Equity
- Stockholders’ equity exhibited a consistent downward trajectory from March 2019 through December 2021, dropping from $5.5 billion to below $2.0 billion. This significant decrease corresponds with the period of asset contraction and suggests erosion of equity possibly due to sustained losses or dividend payouts exceeding earnings. Starting in early 2022, equity values began to stabilize and increase, reaching over $4.5 billion by September 2023. The rebound may indicate improved profitability, capital injections, or retained earnings contributing to restored equity levels.
- Financial Leverage
- Financial leverage, calculated as the ratio of total assets to equity, increased markedly from about 4.0 in early 2019 to a peak near 10.0 at the end of 2021. This sharp rise reflects the reduction in stockholders’ equity at a faster pace than assets, indicating increased reliance on liabilities or debt financing. Elevated leverage ratios point to higher financial risk and potential vulnerability during this period. From 2022 onwards, the leverage ratio declined steadily to below 5.0 by September 2023, correlating with the recovery in equity and slight asset growth. This reduction suggests a strengthening balance sheet with decreased relative indebtedness.
Overall, the data portrays a period of financial strain culminating at the end of 2021, characterized by decreasing equity, stable to declining assets, and rising financial leverage. The subsequent phases reflect efforts to improve financial stability through equity restoration and leverage reduction, indicative of a strategic shift towards a more balanced capital structure.
Interest Coverage
Las Vegas Sands Corp., interest coverage calculation (quarterly data)
| Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Net income (loss) attributable to Las Vegas Sands Corp. | |||||||||||||||||||||||||
| Add: Net income attributable to noncontrolling interest | |||||||||||||||||||||||||
| Less: Income (loss) from discontinued operations, net of tax | |||||||||||||||||||||||||
| Add: Income tax expense | |||||||||||||||||||||||||
| Add: Interest expense, net of amounts capitalized | |||||||||||||||||||||||||
| Earnings before interest and tax (EBIT) | |||||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||||
| Interest coverage1 | |||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||
| Interest Coverage, Competitors2 | |||||||||||||||||||||||||
| Booking Holdings Inc. | |||||||||||||||||||||||||
| DoorDash, Inc. | |||||||||||||||||||||||||
| McDonald’s Corp. | |||||||||||||||||||||||||
| Starbucks Corp. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-09-30), 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).
1 Q3 2023 Calculation
Interest coverage
= (EBITQ3 2023
+ EBITQ2 2023
+ EBITQ1 2023
+ EBITQ4 2022)
÷ (Interest expenseQ3 2023
+ Interest expenseQ2 2023
+ Interest expenseQ1 2023
+ Interest expenseQ4 2022)
= ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
The earnings before interest and tax (EBIT) exhibited significant fluctuations across the observed periods. From the first quarter of 2019 through the first quarter of 2020, EBIT generally remained positive, with a peak in the second quarter of 2019 at 1,487 million US dollars. However, starting from the second quarter of 2020, EBIT turned negative and reached its nadir in the third quarter of 2020 at -921 million US dollars. This negative trend continued, albeit with some volatility, until the first quarter of 2023 when EBIT returned to a positive figure, culminating at 771 million US dollars by the third quarter of 2023.
The net interest expense showed a relatively stable but gradually increasing trend over the timeframe. Starting at 141 million US dollars in the first quarter of 2019, it rose steadily to 210 million US dollars by the third quarter of 2023. This increase indicates a growing burden of interest payments despite fluctuations in EBIT.
Interest coverage, defined as the ratio of EBIT to interest expense, mirrored the volatility observed in EBIT. Initially, the ratio was robust, fluctuating around 7 to 8 from early 2019 through the end of 2019. As EBIT declined sharply from mid-2020 onward, the interest coverage ratio dropped precipitously, falling into negative territory between the second quarter of 2020 and the final quarter of 2022. This indicates that EBIT was insufficient to cover interest expenses during this period. Starting from the first quarter of 2023, interest coverage began to improve gradually, rising back into positive territory and reaching 2.08 by the third quarter of 2023. This recovery suggests an improving ability to meet interest obligations from operating earnings.
In summary, the data reveals a challenging operational environment starting mid-2020, marked by negative EBIT and weakened capacity to cover interest expenses. This period may coincide with external disruptions impacting profitability. More recently, the company demonstrates signs of operational recovery, as reflected by the return to positive EBIT and gradual improvement in interest coverage, albeit interest expense continues on a rising trajectory, which may warrant monitoring in the context of the company’s overall financial health.
- EBIT Trend
- Strong positive performance through early 2020, sharp decline and sustained negative EBIT through 2020-22, gradual recovery by early 2023.
- Interest Expense
- Gradual and steady increase from 141 million to 210 million US dollars over the observed period.
- Interest Coverage
- High and stable coverage pre-2020, drastic decline into negative range during 2020-22, modest recovery to positive ratio by mid-2023.