Appfolio Inc (APPF)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 135,644 | 963 | -72,370 | -11,878 | 9,783 |
| Interest expense | US$ in thousands | — | — | 1,184 | 501 | 1,849 |
| Interest coverage | — | — | -61.12 | -23.71 | 5.29 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $135,644K ÷ $—K
= —
The interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt. A higher ratio indicates that the company is more capable of covering its interest expenses.
Analyzing Appfolio Inc's interest coverage data:
1. As of December 31, 2020, the interest coverage ratio was 5.29, suggesting that the company's operating income was able to cover its interest expenses approximately five times over.
2. However, the ratio for December 31, 2021, declined significantly to -23.71. A negative ratio indicates that the company's operating income was insufficient to cover its interest expenses, raising concerns about its financial health.
3. The ratio for December 31, 2022, further worsened to -61.12, indicating a more severe inability to cover interest costs.
4. The data for December 31, 2023, and December 31, 2024, is not available (denoted by "—"), making it challenging to assess the company's recent financial performance.
In summary, the declining trend in Appfolio Inc's interest coverage ratio from 2020 to 2022 raises red flags regarding its ability to meet interest payments. This indicates potential financial distress and the need for management to address the company's debt servicing capabilities. Additional data beyond 2022 would provide more insight into the company's current financial position.
Peer comparison
Dec 31, 2024