Adtalem Global Education Inc (ATGE)

Interest coverage

		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	Dec 31, 2019	Sep 30, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	226,660	199,356	196,095	175,722	166,101	175,721	490,968	451,402	429,921	412,700	74,545	100,793	133,512	-186,098	-60,945	-73,446	-80,763	274,710	162,284	178,281
Interest expense (ttm)	US$ in thousands	63,659	64,204	62,101	60,997	63,100	67,247	89,375	99,715	129,348	135,289	107,259	85,066	41,365	19,908	16,544	17,874	19,510	20,773	20,368	20,308
Interest coverage		3.56	3.11	3.16	2.88	2.63	2.61	5.49	4.53	3.32	3.05	0.69	1.18	3.23	-9.35	-3.68	-4.11	-4.14	13.22	7.97	8.78

June 30, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $226,660K ÷ $63,659K
= 3.56

The interest coverage ratio for Adtalem Global Education Inc has shown fluctuations over the past quarters. A higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations from its earnings. From December 2020 to March 2022, the interest coverage ratio remained relatively stable, ranging from 3.05 to 5.49, implying the company had a strong ability to cover its interest expenses with operating income.

However, there was a significant decline in the interest coverage ratio in the quarters ending September 2022 and December 2022, dropping to 0.69 and 3.32, respectively. This may suggest a decrease in the company's ability to cover its interest payments during those periods.

The interest coverage ratio turned negative in the quarters ending March 2021, December 2020, September 2020, and June 2020, indicating that the company's operating income was not sufficient to cover its interest expenses during those periods. These negative ratios raise concerns about the company's financial health and its ability to service its debt.

It is important for Adtalem Global Education Inc to consistently monitor its interest coverage ratio to ensure it maintains a healthy level of financial flexibility and can meet its interest obligations. fluctuations in the ratio may indicate changes in the company's profitability and financial stability.