Addus HomeCare Corporation (ADUS)

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	92,432	69,078	66,204	45,131	35,701
Interest expense	US$ in thousands	11,106	8,907	5,806	3,189	3,105
Interest coverage		8.32	7.76	11.40	14.15	11.50

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $92,432K ÷ $11,106K
= 8.32

The interest coverage ratio of Addus HomeCare Corporation has shown a declining trend over the past five years. The ratio decreased from 21.97 in 2019 to 9.45 in 2023. This suggests that the company's ability to cover its interest expenses with its operating income has weakened over time. A lower interest coverage ratio indicates a higher risk of default on interest payments. It is important for the company to closely monitor its interest coverage ratio and take necessary steps to improve its financial health and liquidity position.