Appfolio Inc (APPF)

Interest coverage

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	61,583	963	-47,228	-54,980	-84,231	-72,370	-59,760	-51,954	-20,878	-11,878	-7,288	-3,915	1,284	9,783	12,624	13,398	9,349	6,461	9,069	10,412
Interest expense (ttm)	US$ in thousands	1,478	2,693	3,245	3,619	2,292	1,184	960	651	555	501	3,931	4,719	5,226	5,667	3,563	3,110	2,975	2,978	1,336	952
Interest coverage		41.67	0.36	-14.55	-15.19	-36.75	-61.12	-62.25	-79.81	-37.62	-23.71	-1.85	-0.83	0.25	1.73	3.54	4.31	3.14	2.17	6.79	10.94

March 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $61,583K ÷ $1,478K
= 41.67

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.

From the data provided for Appfolio Inc over the past few quarters, there is significant fluctuation in the interest coverage ratio. In the most recent quarter ended March 31, 2024, the interest coverage ratio stands at an impressive 41.67, indicating the company's ability to cover its interest payments over 41 times with its operating income. This is a positive sign, showing a strong ability to meet interest obligations.

However, looking back at previous quarters, we observe a considerable decline in interest coverage ratios, especially in the quarters ended Dec 31, 2023, and Sep 30, 2023, where the ratios were extremely low at 0.36 and -14.55 respectively. These low ratios imply that the company may have faced challenges in meeting its interest payments from operating income during those periods.

Overall, the trend in Appfolio Inc's interest coverage ratio appears to be volatile, with periods of both strong and weak coverage. Investors and stakeholders should closely monitor this ratio going forward to assess the company's ability to manage its interest expenses effectively and sustainably.