Extreme Networks Inc (EXTR)
Interest coverage
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | -60,513 | 111,491 | 64,983 | 33,041 | -96,742 |
| Interest expense | US$ in thousands | 16,986 | 17,385 | 12,789 | 22,856 | 23,750 |
| Interest coverage | -3.56 | 6.41 | 5.08 | 1.45 | -4.07 |
June 30, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $-60,513K ÷ $16,986K
= -3.56
Extreme Networks Inc's interest coverage ratio has been volatile over the past five years. In Jun 2024, the interest coverage ratio deteriorated significantly to -3.56, indicating that the company's operating income was not sufficient to cover its interest expenses. This represents a concerning situation as a negative interest coverage ratio suggests financial distress.
In contrast, the interest coverage ratio was healthy in Jun 2023 and Jun 2022 at 6.41 and 5.08 respectively, suggesting that the company had more than enough operating income to cover its interest obligations. This indicates a strong ability to meet interest payments and implies a lower risk of default.
However, the interest coverage ratio was lower in Jun 2021 at 1.45, indicating a slight decrease in the company's ability to cover interest expenses. In Jun 2021, the interest coverage ratio was negative at -4.07, indicating a critical situation where the company faced challenges in generating enough operating income to cover interest payments.
Overall, Extreme Networks Inc's interest coverage has shown significant fluctuations, with recent years reflecting inconsistencies in the company's ability to meet its interest obligations. Investors and creditors may view this variability in interest coverage as a red flag and may need to closely monitor the company's financial health.
Peer comparison
Jun 30, 2024