Envestnet Inc (ENV)

Interest coverage

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	-200,809	-57,035	37,894	22,993	-15,155
Interest expense	US$ in thousands	25,138	16,843	16,931	31,504	32,520
Interest coverage		-7.99	-3.39	2.24	0.73	-0.47

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $-200,809K ÷ $25,138K
= -7.99

The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt obligations. A higher ratio indicates a stronger ability to cover interest expenses.

For Envestnet Inc., the interest coverage ratio has been fluctuating over the past five years. In 2023, the ratio was -1.06, showing that the company's operating income was not sufficient to cover its interest payments. This indicates a potential risk regarding the company's ability to meet its debt obligations from its earnings.

In 2022, the interest coverage ratio was -5.22, reflecting a further deterioration in the company's ability to cover interest expenses. This suggests a significant strain on Envestnet's financial resources to meet its debt commitments.

In 2021, the interest coverage ratio improved to 2.52, indicating that the company's operating income was more than enough to cover its interest payments. This is a positive sign of improved financial health and a reduced risk of default on debt obligations.

In 2020 and 2019, the interest coverage ratios were 0.64 and -0.55, respectively, indicating that the company struggled to cover its interest expenses during these years.

Overall, Envestnet Inc. has experienced varying levels of ability to cover its interest payments in recent years, with fluctuations indicating potential financial challenges. Investors and creditors may need to closely monitor the company's financial performance and debt management strategies to assess its ability to meet its debt obligations in the future.