Godaddy Inc (GDDY)

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	582,000	502,100	379,100	-405,100	217,100
Interest expense	US$ in thousands	179,000	146,300	126,000	91,300	92,100
Interest coverage		3.25	3.43	3.01	-4.44	2.36

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $582,000K ÷ $179,000K
= 3.25

The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt using its operating income. It is calculated by dividing the earnings before interest and taxes (EBIT) by the total interest expense.

For Godaddy Inc, the interest coverage ratio has been relatively stable over the past five years, ranging from 2.20 to 3.57. A higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations from its operating income.

In 2023, Godaddy Inc's interest coverage ratio improved to 3.57 from 3.52 in 2022, indicating that the company's ability to cover its interest payments increased. This suggests that Godaddy Inc's earnings before interest and taxes were 3.57 times higher than its interest expense in 2023.

Overall, the trend in Godaddy Inc's interest coverage ratio shows that the company has been effectively managing its debt obligations in recent years, with a consistent ability to cover its interest payments from its operating income.