Equifax Inc (EFX)
Interest coverage
| 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 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 952,800 | 906,800 | 921,000 | 974,900 | 1,108,700 | 1,089,500 | 1,123,100 | 1,128,700 | 1,090,600 | 1,043,000 | 1,086,500 | 940,100 | 820,800 | 755,400 | 538,500 | 491,500 | -308,200 | -317,200 | -378,800 | -302,100 |
| Interest expense (ttm) | US$ in thousands | 241,400 | 235,600 | 219,900 | 200,800 | 182,900 | 166,900 | 154,800 | 148,100 | 145,600 | 144,000 | 146,400 | 148,100 | 141,600 | 134,100 | 124,700 | 115,700 | 111,700 | 108,800 | 107,500 | 106,300 |
| Interest coverage | 3.95 | 3.85 | 4.19 | 4.86 | 6.06 | 6.53 | 7.26 | 7.62 | 7.49 | 7.24 | 7.42 | 6.35 | 5.80 | 5.63 | 4.32 | 4.25 | -2.76 | -2.92 | -3.52 | -2.84 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $952,800K ÷ $241,400K
= 3.95
Equifax, Inc.'s interest coverage ratio has been fluctuating over the past eight quarters, ranging from 3.87 to 7.86. A higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations from its operating earnings.
The trend in Equifax's interest coverage ratio shows a general decrease over the quarters, from a high of 7.86 in Q1 2022 to a low of 3.87 in Q4 2023. This decline suggests that the company may be facing challenges in generating enough earnings to cover its interest expenses efficiently.
While the company's interest coverage ratio in most quarters remains above 3, indicating a sufficient ability to cover interest payments, the downward trend should be a point of concern for investors and creditors. Management should focus on improving profitability and managing its debt levels to ensure the company's financial health in the long term. Further analysis, including a comparison with industry benchmarks and peer companies, would provide more context on Equifax's performance in this area.