Dynatrace Holdings LLC (DT)

Interest coverage

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	156,315	92,811	81,307	91,896	-171,939
Interest expense	US$ in thousands	1,400	8,600	10,192	14,205	45,397
Interest coverage		111.65	10.79	7.98	6.47	-3.79

March 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $156,315K ÷ $1,400K
= 111.65

Interest coverage is a financial ratio that indicates a company's ability to meet its interest obligations on outstanding debt. A higher interest coverage ratio is generally seen as favorable as it suggests the company is more capable of servicing its debt.

Dynatrace Holdings LLC's interest coverage has shown a significant improvement over the years, indicating a strengthening ability to cover its interest expenses. The interest coverage ratio has increased from -3.79 in 2020 to 111.65 in 2024. This demonstrates a substantial enhancement in the company's ability to cover its interest expenses with its earnings.

The favorable trend in the interest coverage ratio indicates that Dynatrace Holdings LLC has been generating more earnings relative to its interest expenses, which is a positive signal for its financial health. This improvement may be attributed to various factors such as increased profitability, operational efficiency, or effective debt management strategies implemented by the company.

Overall, the consistent improvement in Dynatrace Holdings LLC's interest coverage ratio signifies a positive trajectory in its financial performance and ability to meet its interest payment obligations.