Digi International Inc (DGII)

Interest coverage

		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	Dec 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	38,273	36,859	36,456	40,559	50,124	53,703	51,090	46,571	38,318	24,645	18,674	14,419	10,384	11,887	10,790	11,205	11,083	8,794	7,636	4,959
Interest expense (ttm)	US$ in thousands	15,415	18,861	22,230	24,926	25,236	24,000	22,693	20,763	19,690	15,023	10,098	5,881	1,385	1,545	2,074	3,562	3,592	3,074	2,174	442
Interest coverage		2.48	1.95	1.64	1.63	1.99	2.24	2.25	2.24	1.95	1.64	1.85	2.45	7.50	7.69	5.20	3.15	3.09	2.86	3.51	11.22

September 30, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $38,273K ÷ $15,415K
= 2.48

The interest coverage ratio for Digi International Inc shows the company's ability to pay interest expenses on its debt obligations. A higher ratio indicates the company is more capable of meeting its interest payments from its operating income.

From the data provided, we can see that Digi International's interest coverage ratio has varied over the past few quarters. The ratio has fluctuated between 1.63 and 2.48 in the recent quarters, showing some inconsistency in the company's ability to cover its interest expenses from its operating earnings.

Notably, there was a significant spike in the interest coverage ratio to 11.22 in the third quarter of 2021 and to 7.50 in the fourth quarter of 2021. These high ratios suggest that Digi International had a substantial increase in its operating income relative to its interest expenses during those periods.

Overall, while the interest coverage ratio has shown some volatility, it is crucial for investors and creditors to closely monitor Digi International's ability to generate sufficient operating income to cover its interest obligations consistently in the long term.