Etsy Inc (ETSY)

Interest coverage

		Dec 31, 2024	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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	380,208	340,534	342,273	269,732	279,841	303,727	-739,609	-664,676	-658,560	-649,992	391,366	406,441	481,539	498,351	512,781	547,487	407,734	275,673	189,831	88,536
Interest expense (ttm)	US$ in thousands	0	10,970	10,970	10,970	14,042	17,240	2,101,520	2,102,121	2,100,721	2,090,092	8,591	9,872	9,885	17,763	25,599	33,743	42,025	40,520	34,982	29,634
Interest coverage		—	31.04	31.20	24.59	19.93	17.62	-0.35	-0.32	-0.31	-0.31	45.56	41.17	48.71	28.06	20.03	16.23	9.70	6.80	5.43	2.99

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $380,208K ÷ $0K
= —

Etsy Inc's interest coverage ratio has shown a positive trend over the years, reflecting the company's ability to cover its interest expenses. The interest coverage ratio measures the company's ability to pay its interest obligations with its earnings before interest and taxes (EBIT).

From March 31, 2020, to June 30, 2024, the interest coverage ratio steadily increased from 2.99 to 31.20, indicating a significant improvement in the company's ability to meet its interest payments. During this period, the ratio consistently remained above 1, which is typically considered a healthy sign as it shows that the company's operating income is sufficient to cover its interest expenses.

However, there were instances in the data where the interest coverage ratio dropped below 1, specifically in the last quarter of 2022 and the first quarter of 2023, where the ratio was negative (-0.31, -0.32, -0.35). This signifies that Etsy Inc's EBIT was not enough to cover its interest obligations during those periods.

Overall, the increasing trend in the interest coverage ratio from 2020 to 2024 demonstrates Etsy Inc's improving financial health and ability to manage its interest payments. However, it is essential for investors and stakeholders to monitor the company's performance closely, especially during periods where the ratio falls below 1, as it may indicate potential financial challenges.