Dropbox Inc (DBX)
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 | 486,300 | 383,500 | 356,500 | 305,700 | 121,200 |
| Interest expense | US$ in thousands | 13,900 | 15,200 | 3,300 | 12,700 | 10,800 |
| Interest coverage | 34.99 | 25.23 | 108.03 | 24.07 | 11.22 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $486,300K ÷ $13,900K
= 34.99
Based on the data provided, Dropbox Inc's interest coverage has shown a positive trend over the years. In December 2020, the interest coverage ratio was 11.22, indicating the company generated sufficient earnings to cover its interest expenses over 11 times. This ratio increased significantly to 24.07 in December 2021, further improving to 108.03 in December 2022, showcasing a substantial improvement in the company's ability to cover its interest payments.
Although there was a slight decline in the interest coverage ratio to 25.23 in December 2023, it remained at a healthy level, indicating Dropbox Inc's continued ability to comfortably meet its interest obligations. By the end of December 2024, the interest coverage ratio improved again to 34.99, indicating a strong position in terms of covering interest expenses with operating income.
Overall, the steady increase and maintenance of the interest coverage ratio suggest that Dropbox Inc has been effectively managing its financial obligations and generating sufficient earnings to cover its interest payments, reflecting a potentially lower risk of financial distress related to debt service.
Peer comparison
Dec 31, 2024