Blackbaud Inc (BLKB)

Interest coverage

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	57,566	-19,772	25,086	38,901	31,203
Interest expense	US$ in thousands	39,922	35,803	18,003	17,287	20,618
Interest coverage		1.44	-0.55	1.39	2.25	1.51

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $57,566K ÷ $39,922K
= 1.44

Interest coverage measures the 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. Looking at Blackbaud Inc's interest coverage over the past five years, we see fluctuation in the ratio.

In 2023, Blackbaud Inc's interest coverage improved to 1.44, indicating the company's operating income was 1.44 times its interest expenses, a positive sign. However, in 2022, the interest coverage was negative at -0.84, suggesting the company's operating income was insufficient to cover interest expenses, a concerning situation.

The interest coverage ratio in 2021 was 1.43, which again indicates that the company's operating income was just able to cover its interest expenses. The ratio improved in 2020 to 2.40, signaling a better ability to cover interest obligations. In 2019, the interest coverage was 1.85, showing a moderate ability to cover interest expenses.

Overall, fluctuations in Blackbaud Inc's interest coverage ratio over the years indicate varying levels of financial risk and profitability. It is important for the company to focus on maintaining a healthy interest coverage ratio to ensure it can meet its interest obligations and potentially attract more investors.