Dayforce Inc. (DAY)

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	78,700	99,600	93,900	111,000	117,700	70,100	39,100	-1,900	-58,900	-40,600	-50,400	-66,000	-54,400	-76,200	-57,200	-25,600	5,100	50,400	55,700	69,200
Interest expense (ttm)	US$ in thousands	40,600	42,100	42,200	40,200	36,100	35,900	34,400	32,000	28,600	30,300	32,900	36,100	35,900	31,200	27,100	23,800	25,100	26,600	28,500	30,400
Interest coverage		1.94	2.37	2.23	2.76	3.26	1.95	1.14	-0.06	-2.06	-1.34	-1.53	-1.83	-1.52	-2.44	-2.11	-1.08	0.20	1.89	1.95	2.28

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $78,700K ÷ $40,600K
= 1.94

Dayforce Inc.'s interest coverage ratio has witnessed fluctuations over the period from March 31, 2020, to December 31, 2024. The interest coverage ratio measures the company's ability to meet interest obligations on its debt using its earnings.

From March 31, 2020, to March 31, 2021, Dayforce Inc.'s interest coverage declined steadily, reaching negative levels by June 30, 2021. This indicated that the company was struggling to generate enough earnings to cover its interest expenses during this period.

Thereafter, the interest coverage ratio improved gradually, turning positive by March 31, 2023. The company's ability to cover its interest payments improved significantly from this point onwards, reaching its peak at 3.26 on December 31, 2023.

Overall, the trend in Dayforce Inc.'s interest coverage ratio suggests that the company faced challenges in meeting its interest obligations in the past but has since improved its financial position and is now better able to cover its interest expenses with its earnings.