Medpace Holdings Inc (MEDP)

Interest coverage

		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	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	336,825	325,936	318,855	300,698	278,697	257,121	233,007	215,219	198,615	198,748	191,457	179,137	167,042	148,172	131,741	136,872	127,263	121,811	118,738	106,824
Interest expense (ttm)	US$ in thousands	4,176	3,159	4,638	3,820	3,013	2,209	1,648	1,338	2,194	2,457	2,002	1,998	2,062	2,164	1,849	2,363	2,344	3,555	5,243	6,803
Interest coverage		80.66	103.18	68.75	78.72	92.50	116.40	141.39	160.85	90.53	80.89	95.63	89.66	81.01	68.47	71.25	57.92	54.29	34.26	22.65	15.70

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $336,825K ÷ $4,176K
= 80.66

The interest coverage ratio for Medpace Holdings Inc has shown significant fluctuations over the past eight quarters. The ratio ranged from a low of 5,816.73 in Q1 2022 to a high of 68.75 in Q2 2023. This indicates that the company's ability to cover its interest expenses with its earnings has varied greatly during this period.

The sudden spike in the interest coverage ratio in Q1 2022 to 5,816.73 may signal an exceptional quarter where earnings were significantly higher than interest expenses, which is a positive indicator of financial health. However, the subsequent decline in this ratio over the following quarters may raise concerns about the company's ability to consistently generate enough earnings to cover its interest obligations.

The recent improvement in interest coverage in Q4 2023 to 690.22 compared to the previous quarters suggests a positive trend towards better profitability and financial stability. Overall, further monitoring of the interest coverage ratio is recommended to assess the company's financial performance and ability to manage its debt obligations effectively.