ACI Worldwide Inc (ACIW)

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	226,113	201,357	182,883	202,511	259,828	276,133	257,829	248,038	220,125	158,409	164,149	178,559	155,256	160,218	180,690	145,074	136,243	146,101	119,982	120,372
Interest expense (ttm)	US$ in thousands	78,486	74,820	69,316	61,191	53,193	48,131	45,003	44,479	45,060	46,335	48,052	50,934	56,630	62,347	68,409	69,590	64,033	55,799	49,385	43,779
Interest coverage		2.88	2.69	2.64	3.31	4.88	5.74	5.73	5.58	4.89	3.42	3.42	3.51	2.74	2.57	2.64	2.08	2.13	2.62	2.43	2.75

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $226,113K ÷ $78,486K
= 2.88

The interest coverage ratio measures ACI Worldwide Inc's ability to meet interest payments on its debt obligations with its operating income. Based on the data provided, the company's interest coverage ratio has been fluctuating over the past eight quarters.

In Q4 2023, the interest coverage ratio was 3.43, indicating that the company generated operating income 3.43 times greater than its interest expenses for that quarter. This was a slight improvement from the previous quarter, Q3 2023, where the ratio was 3.22.

However, the interest coverage ratio in Q2 2023 decreased to 2.46, suggesting that the company's ability to cover its interest payments weakened in that period. The ratio then improved in Q1 2023 to 3.14 but remained lower than the ratios reported in the same quarters of the previous year.

Looking back at Q4 2022, the interest coverage ratio was significantly higher at 5.01, demonstrating a stronger ability to cover interest expenses compared to the most recent quarters. The trend continued with higher ratios in Q3 2022 (6.07) and Q2 2022 (7.36), indicating a favorable financial position during that time.

Overall, the interest coverage ratio for ACI Worldwide Inc has shown some variability in recent quarters, with a general downward trend from the previous year. It is essential for stakeholders to monitor this ratio closely to ensure the company's ability to meet its debt obligations and assess its financial health.