Blackline Inc (BL)

Interest coverage

		Dec 31, 2024	Sep 30, 2024	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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	40,381	38,863	15,945	43,233	36,341	15,811	2,350	-39,090	-59,288	-68,756	-45,542	-45,309	-39,074	-28,910	-35,294	-25,649	-10,736	-7,199	-12,697	-16,841
Interest expense (ttm)	US$ in thousands	8,758	7,719	6,531	5,912	5,898	5,878	5,871	5,858	5,850	20,749	35,377	49,588	62,945	52,553	42,357	32,430	23,311	22,984	20,076	14,335
Interest coverage		4.61	5.03	2.44	7.31	6.16	2.69	0.40	-6.67	-10.13	-3.31	-1.29	-0.91	-0.62	-0.55	-0.83	-0.79	-0.46	-0.31	-0.63	-1.17

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $40,381K ÷ $8,758K
= 4.61

The interest coverage ratio is a measure of a company's ability to meet its interest obligations from its operating profits. A ratio below 1 indicates that the company is not generating enough operating income to cover its interest expenses, which can be a cause for concern as it implies the company may have difficulty meeting its debt obligations.

Analyzing the data provided for Blackline Inc, we observe that the interest coverage ratio has been consistently negative from March 31, 2020, to June 30, 2022, indicating the company's operating profits were insufficient to cover its interest expenses during this period. This continuous negative trend suggests potential financial distress.

From September 30, 2022, to March 31, 2024, the interest coverage ratio improved significantly and turned positive, indicating that the company's operating profits were able to cover its interest expenses. This positive trend is a positive sign as it shows that the company's financial position may have strengthened during this period.

Overall, it is essential for Blackline Inc to maintain a healthy interest coverage ratio to ensure it can meet its interest obligations comfortably and demonstrate financial stability to investors and creditors. Monitoring this ratio over time can provide insights into the company's financial health and ability to handle its debt obligations.