Blackline Inc (BL)
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 | 133,456 | 66,407 | -41,561 | -44,926 | -15,389 |
| Interest expense | US$ in thousands | 8,758 | 5,898 | 5,850 | 62,945 | 23,311 |
| Interest coverage | 15.24 | 11.26 | -7.10 | -0.71 | -0.66 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $133,456K ÷ $8,758K
= 15.24
The interest coverage ratio measures a company's ability to meet its interest obligations by comparing its earnings before interest and taxes (EBIT) to its interest expense. A ratio below 1 indicates that the company is not generating enough operating income to cover its interest payments, which can be a sign of financial distress.
In the case of Blackline Inc, the interest coverage ratio was negative for the years ending December 31, 2020 (-0.66) and December 31, 2021 (-0.71), indicating that the company's operating income was insufficient to cover its interest expenses during those periods. This suggests a potentially risky financial situation where the company may struggle to service its debt.
However, the interest coverage ratio improved significantly in the subsequent years, reaching -7.10 as of December 31, 2022, 11.26 as of December 31, 2023, and 15.24 as of December 31, 2024. These positive ratios indicate that Blackline Inc's operating income exceeded its interest expenses during these periods, signaling a more secure financial position with improved capacity to fulfill its debt obligations.
Overall, the upward trend in Blackline Inc's interest coverage ratio from negative to positive values over the years demonstrates a positive shift towards better financial health and a strengthened ability to manage its interest payments.
Peer comparison
Dec 31, 2024