Extreme Networks Inc (EXTR)

Interest coverage

		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	Dec 31, 2019	Sep 30, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	-60,513	26,895	117,754	130,889	111,443	83,216	70,700	64,449	64,983	71,856	65,884	52,515	33,041	2,123	-46,195	-66,543	-96,693	-95,378	-60,621	-40,149
Interest expense (ttm)	US$ in thousands	16,986	18,495	18,262	17,877	17,385	14,695	13,543	12,735	12,789	14,281	17,081	20,073	22,856	24,698	25,083	25,249	23,750	20,386	17,403	14,235
Interest coverage		-3.56	1.45	6.45	7.32	6.41	5.66	5.22	5.06	5.08	5.03	3.86	2.62	1.45	0.09	-1.84	-2.64	-4.07	-4.68	-3.48	-2.82

June 30, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-60,513K ÷ $16,986K
= -3.56

Interest coverage ratio is a financial metric used to evaluate a company's ability to cover its interest expenses with its operating profits. Extreme Networks Inc's interest coverage ratio has been volatile over the past 10 quarters, ranging from negative values to positive values.

The interest coverage ratio was negative in several quarters, indicating that the company did not generate enough operating profits to cover its interest expenses. This raises concerns about the company's financial health and ability to meet its debt obligations.

In more recent quarters, the interest coverage ratio has improved, reaching above 1.0, which suggests that Extreme Networks Inc is generating enough operating profits to cover its interest expenses. However, the ratio is still relatively low, indicating a moderate level of financial risk.

Overall, Extreme Networks Inc's interest coverage ratio has shown inconsistency and variability, highlighting the company's fluctuating ability to cover its interest expenses with its operating profits. Investors and creditors should closely monitor this ratio to assess the company's financial stability and debt repayment capacity.