Addus HomeCare Corporation (ADUS)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 105,496 | 107,053 | 102,611 | 97,786 | 92,432 | 84,869 | 79,049 | 74,221 | 69,078 | 67,708 | 67,506 | 67,583 | 66,204 | 58,432 | 53,645 | 46,328 | 45,131 | 48,324 | 43,261 | 40,985 |
| Interest expense (ttm) | US$ in thousands | 7,732 | 8,560 | 11,186 | 11,403 | 11,106 | 10,620 | 9,893 | 9,548 | 8,907 | 7,992 | 7,134 | 6,410 | 5,806 | 4,972 | 4,038 | 3,497 | 3,189 | 3,250 | 3,436 | 3,395 |
| Interest coverage | 13.64 | 12.51 | 9.17 | 8.58 | 8.32 | 7.99 | 7.99 | 7.77 | 7.76 | 8.47 | 9.46 | 10.54 | 11.40 | 11.75 | 13.29 | 13.25 | 14.15 | 14.87 | 12.59 | 12.07 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $105,496K ÷ $7,732K
= 13.64
The interest coverage ratio measures a company's ability to meet its interest obligations on its debt. A higher interest coverage ratio indicates a stronger ability to meet interest payments.
Based on the provided data for Addus HomeCare Corporation, the interest coverage ratio has exhibited some fluctuations over the reporting periods. The ratio started at 12.07 as of March 31, 2020, and generally increased to reach a peak of 14.87 as of September 30, 2020. However, the ratio then started to decline gradually, reaching a low of 7.76 by December 31, 2022.
Despite some fluctuations, the interest coverage ratio generally remained above 1, indicating that Addus HomeCare Corporation was able to cover its interest expenses with operating income throughout the reporting periods. However, the declining trend in the interest coverage ratio from 2020 to 2023 is a point of attention, as it may suggest a decreasing ability to cover interest payments with operating income.
It's important for stakeholders to monitor the interest coverage ratio over time to ensure the company's financial health and its ability to manage its debt obligations. Additionally, further analysis and consideration of other financial metrics are recommended to gain a holistic understanding of Addus HomeCare Corporation's financial performance and leverage position.
Peer comparison
Dec 31, 2024