Bill Com Holdings Inc (BILL)
Interest coverage
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | -174,164 | -207,714 | -321,260 | -111,179 | -30,809 |
| Interest expense | US$ in thousands | 19,182 | 15,203 | 9,419 | 28,158 | 229 |
| Interest coverage | -9.08 | -13.66 | -34.11 | -3.95 | -134.54 |
June 30, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $-174,164K ÷ $19,182K
= -9.08
Interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio indicates a company is more capable of meeting its interest obligations. Conversely, a lower ratio suggests potential financial risk due to inadequate earnings to cover interest costs.
Analyzing the interest coverage ratio of Bill Com Holdings Inc over the five-year period reveals a concerning trend. The company's interest coverage ratio has been consistently negative, indicating that the company's operating income was insufficient to cover its interest expenses.
In June 30, 2020, the interest coverage ratio was reported at -134.54, reflecting a substantial inability to cover interest expenses. Although there was an improvement in the subsequent years, with ratios of -3.95, -34.11, -13.66, and -9.08 in the years 2021, 2022, 2023, and 2024 respectively, the company still struggled to generate enough income to comfortably cover its interest payments.
Overall, the consistently negative interest coverage ratios of Bill Com Holdings Inc raise concerns about the company's financial health and its ability to meet its financial obligations in the long run. Investors and stakeholders should closely monitor the company's performance and financial management to address the underlying issues leading to such poor interest coverage ratios.
Peer comparison
Jun 30, 2024