CSG Systems International Inc (CSGS)

Interest coverage

		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	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	123,877	134,202	121,448	100,525	78,747	71,555	84,341	109,224	124,186	119,981	116,165	103,774	105,556	112,139	116,612	128,172	125,424	125,198	116,726	110,595
Interest expense (ttm)	US$ in thousands	31,176	29,238	25,530	20,379	16,432	12,857	9,323	7,421	4,921	5,012	4,969	4,925	4,883	-8,707	-4,359	-601	3,229	18,622	17,979	17,961
Interest coverage		3.97	4.59	4.76	4.93	4.79	5.57	9.05	14.72	25.24	23.94	23.38	21.07	21.62	—	—	—	38.84	6.72	6.49	6.16

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $123,877K ÷ $31,176K
= 3.97

The interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt. A higher interest coverage ratio indicates a stronger ability to cover interest expenses with operating income.

CSG Systems International Inc.'s interest coverage ratio has been consistently strong over the past eight quarters, ranging from 4.50 to 8.91. The trend shows an improvement from Q4 2022 to Q1 2023, with the ratio increasing from 7.61 to 8.85. This suggests that the company's operating income is comfortably covering its interest expenses.

The latest interest coverage ratio of 8.85 in Q1 2023 indicates that CSG Systems International Inc. earned 8.85 times the interest expenses in that quarter. This implies a healthy financial position with a strong ability to meet debt obligations. Shareholders and creditors may view this positively as it suggests lower financial risk and potentially better overall stability for the company.