Kyndryl Holdings Inc (KD)
Interest coverage
| Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | ||
|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | -48,000 | -332,000 | -527,000 | -650,000 | -755,000 | -1,199,000 | -1,539,000 |
| Interest expense (ttm) | US$ in thousands | 121,000 | 120,000 | 116,000 | 104,000 | 95,000 | 84,000 | 74,000 |
| Interest coverage | -0.40 | -2.77 | -4.54 | -6.25 | -7.95 | -14.27 | -20.80 |
March 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-48,000K ÷ $121,000K
= -0.40
Kyndryl Holdings Inc's interest coverage ratio has been deteriorating over the past few quarters. The interest coverage ratio indicates the company's ability to meet its interest obligations with its operating income. A ratio below 1 indicates that the company is not generating enough operating income to cover its interest expenses.
Looking at the historical trend, Kyndryl's interest coverage ratio has been consistently below 1, with negative ratios recorded in recent quarters. This suggests that the company is facing significant challenges in generating enough operating income to cover its interest expenses. A negative interest coverage ratio indicates that the company's operating income is insufficient to cover its interest payments.
The decreasing trend in the interest coverage ratio over the quarters indicates a worsening financial position for Kyndryl Holdings Inc. Investors and creditors may view this trend negatively as it raises concerns about the company's ability to meet its debt obligations. It is crucial for the company to enhance its profitability and operational efficiency to improve its interest coverage ratio and ensure its long-term financial sustainability.
Peer comparison
Mar 31, 2024