Dayforce Inc. (DAY)

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	78,200	132,100	-34,300	-54,400	5,100
Interest expense	US$ in thousands	40,600	36,100	28,600	35,900	25,100
Interest coverage		1.93	3.66	-1.20	-1.52	0.20

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $78,200K ÷ $40,600K
= 1.93

Based on the data provided, Dayforce Inc.'s interest coverage ratio has fluctuated over the years. The interest coverage ratio is used to assess a company's ability to meet its interest obligations with its operating income.

As of December 31, 2020, the interest coverage ratio was 0.20, indicating that the company's operating income was insufficient to cover its interest expenses, raising concerns about its financial health.

By December 31, 2021, the interest coverage ratio deteriorated further to -1.52, suggesting that Dayforce Inc. was not generating enough operating income to cover its interest costs, which could potentially lead to financial distress.

The situation improved slightly by December 31, 2022, with an interest coverage ratio of -1.20, but the company was still struggling to meet its interest obligations from its operational earnings.

However, there was a significant improvement in the interest coverage ratio as of December 31, 2023, reaching 3.66. This indicates that Dayforce Inc. generated more than enough operating income to cover its interest expenses, suggesting a healthier financial position.

By December 31, 2024, the interest coverage ratio remained positive at 1.93, showing continued improvement in the company's ability to service its interest payments with its operating income.

In conclusion, the trend in Dayforce Inc.'s interest coverage ratio reflects periods of financial strain followed by a notable recovery, indicating fluctuations in the company's financial performance and its ability to meet interest obligations. Monitoring this ratio over time is crucial for assessing the company's financial stability and debt repayment capacity.