Appfolio Inc (APPF)
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 | 963 | -72,370 | -11,878 | 9,783 | 6,461 |
| Interest expense | US$ in thousands | — | 1,184 | 501 | 1,849 | 1,654 |
| Interest coverage | — | -61.12 | -23.71 | 5.29 | 3.91 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $963K ÷ $—K
= —
The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio indicates a stronger ability to meet interest obligations.
Appfolio Inc's interest coverage ratio has been fluctuating over the years. In 2019 and 2020, the company had ratios of 3.91 and 5.29 respectively, indicating that it was able to cover its interest expenses more comfortably during those years. However, in 2021 and 2022, the interest coverage ratios decreased significantly to -23.71 and -61.12 respectively.
A negative interest coverage ratio, as seen in 2021 and 2022, suggests that the company's operating income was insufficient to cover its interest expenses, raising concerns about its financial health and ability to meet debt obligations.
It is important for investors and creditors to closely monitor Appfolio Inc's future interest coverage ratios to assess the company's ability to meet its interest payments and manage its debt effectively.
Peer comparison
Dec 31, 2023