ServiceNow Inc (NOW)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 1,364,000 | 1,260,000 | 1,073,000 | 950,000 | 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 |
| Interest expense (ttm) | US$ in thousands | 23,000 | 24,000 | 24,000 | 24,000 | 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 |
| Interest coverage | 59.30 | 52.50 | 44.71 | 39.58 | 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 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,364,000K ÷ $23,000K
= 59.30
ServiceNow Inc's interest coverage ratio has shown a consistent improvement over the past few years, indicating a strong ability to meet its interest obligations. The interest coverage ratio measures the company's ability to pay interest expenses on outstanding debt with its operating income.
Starting from March 31, 2020, with a ratio of 4.80, the interest coverage ratio has steadily increased, reaching 59.30 by December 31, 2024. This steady improvement in the interest coverage ratio suggests that ServiceNow Inc's operating income has been consistently sufficient to cover its interest expenses.
The increasing trend in the interest coverage ratio is a positive signal for investors and lenders as it indicates the company's improving financial health and ability to service its debt obligations. A higher interest coverage ratio signifies stronger financial stability and a lower risk of default on debt payments.
Overall, the trend of ServiceNow Inc's interest coverage ratio reflects a financially sound and stable position, demonstrating its capacity to comfortably meet its interest payments.
Peer comparison
Dec 31, 2024