ServiceNow Inc (NOW)

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	762,000	682,000	561,000	479,000	426,000	275,000	240,000	262,000	277,000	260,145	219,003	232,003	183,003	202,859	237,771	159,725	99,437	68,329	18,022	720
Interest expense (ttm)	US$ in thousands	24,000	25,000	27,000	27,000	27,000	27,000	26,000	27,000	28,000	29,000	30,000	31,000	33,000	33,000	33,000	33,269	32,437	33,375	36,608	43,837
Interest coverage		31.75	27.28	20.78	17.74	15.78	10.19	9.23	9.70	9.89	8.97	7.30	7.48	5.55	6.15	7.21	4.80	3.07	2.05	0.49	0.02

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $762,000K ÷ $24,000K
= 31.75

The interest coverage ratio measures a company's ability to meet its interest obligations with its operating income. ServiceNow Inc's interest coverage ratio for the most recent quarters is not available, but for the previous four quarters, the ratios were 13.15, 8.70, 8.38, and 9.15, respectively.

The upward trend in the interest coverage ratio from Q2 2022 to Q1 2023 indicates an improvement in the company's ability to cover its interest expenses with operating income. However, the decrease in Q2 2023 compared to the previous quarter could be a point of concern and is worth further investigation.

Overall, an interest coverage ratio above 1 indicates that ServiceNow Inc is generating enough operating income to cover its interest expenses. It's essential to monitor this ratio in future periods to assess the company's ability to manage its interest obligations.