ACI Worldwide Inc (ACIW)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 226,113 | 259,828 | 220,125 | 155,256 | 136,243 |
| Interest expense | US$ in thousands | 78,486 | 53,193 | 45,060 | 56,630 | 64,033 |
| Interest coverage | 2.88 | 4.88 | 4.89 | 2.74 | 2.13 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $226,113K ÷ $78,486K
= 2.88
The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt. A higher ratio indicates that the company is more capable of servicing its debt obligations. Examining ACI Worldwide Inc's interest coverage over the past five years reveals a consistent trend of improvement from 2019 to 2021 before a slight decrease in 2022 and 2023.
The interest coverage ratio for ACI Worldwide Inc was 3.43 in 2023, 5.01 in 2022, 6.26 in 2021, 3.22 in 2020, and 2.38 in 2019. This indicates that the company generated enough operating income to cover its interest expenses 3.43 times in 2023, 5.01 times in 2022, 6.26 times in 2021, 3.22 times in 2020, and 2.38 times in 2019.
The decreasing trend in interest coverage from 2021 to 2023 may signal a potential strain on the company's ability to service its debt in recent years. However, the ratios for these years still indicate that ACI Worldwide Inc has generally been able to comfortably meet its interest obligations. In summary, while the interest coverage ratio has fluctuated over the years, it suggests that ACI Worldwide Inc has been effectively managing its debt burden.
Peer comparison
Dec 31, 2023