Akamai Technologies Inc (AKAM)

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	671,711	639,670	614,760	635,123	661,464	688,247	738,010	757,026	786,545	723,548	697,588	702,880	672,096	683,633	647,942	591,721	580,749	561,997	538,276	457,419
Interest expense (ttm)	US$ in thousands	17,709	13,509	11,307	11,082	11,096	26,729	42,088	57,193	72,332	71,357	70,537	69,749	69,120	68,453	63,256	54,453	49,364	47,271	49,710	50,468
Interest coverage		37.93	47.35	54.37	57.31	59.61	25.75	17.53	13.24	10.87	10.14	9.89	10.08	9.72	9.99	10.24	10.87	11.76	11.89	10.83	9.06

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $671,711K ÷ $17,709K
= 37.93

Interest coverage is a financial ratio that measures a company's ability to pay interest on its outstanding debt. It is calculated by dividing earnings before interest and taxes (EBIT) by the total interest expense. A higher interest coverage ratio indicates a stronger ability to meet interest obligations.

Looking at the data provided for Akamai Technologies Inc, we can see that the interest coverage ratio has fluctuated significantly over the past eight quarters. In Q4 2023, the interest coverage ratio was 58.41, which decreased compared to the previous quarter but still indicates a strong ability to cover interest payments. The ratio then increased sharply in Q3 2023 to 130.02 and further increased in Q2 2023 to 195.90, demonstrating an improving ability to cover interest expenses.

A notable anomaly occurred in Q1 2023, where the interest coverage ratio spiked to a very high level of 3,300.14. This exceptionally high ratio may be attributed to extraordinary factors such as a significant increase in EBIT or a decrease in interest expenses during that period.

Comparing these figures to the previous quarters, we see that in Q4 2022, the interest coverage ratio was 216.56, showing a noticeable decline compared to the ratios observed in the following quarters. It is important to note that data for Q3 and Q2 of 2022 is not available, so a complete trend analysis is not possible for those periods.

Overall, the trend in interest coverage ratios for Akamai Technologies Inc shows variability, but generally indicates a strong ability to meet interest obligations. It is essential for investors and stakeholders to monitor these ratios over time to assess the company's financial health and debt repayment capacity.