Insight Enterprises Inc (NSIT)
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 | 418,978 | 413,930 | 333,073 | 270,046 | 240,194 |
| Interest expense | US$ in thousands | 41,124 | 39,497 | 40,516 | 41,594 | 28,478 |
| Interest coverage | 10.19 | 10.48 | 8.22 | 6.49 | 8.43 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $418,978K ÷ $41,124K
= 10.19
Insight Enterprises Inc.'s interest coverage ratio has shown a generally improving trend over the past five years. The ratio increased from 9.04 in 2019 to 10.54 in 2023, indicating the company's ability to cover its interest expenses with its operating income has strengthened over this period.
The interest coverage ratio of 10.54 in 2023 suggests that the company's operating income is 10.54 times its interest expenses for the year, reflecting a strong capacity to meet its interest obligations. This implies a lower financial risk for the company as higher interest coverage signifies a greater cushion against potential financial distress from interest payments.
In 2021, there was a dip in the interest coverage to 8.16, but the ratio rebounded in the following years. The consistent improvement in the interest coverage ratio from 2021 to 2023 indicates a positive trend in the company's ability to manage its interest obligations efficiently.
Overall, Insight Enterprises Inc.'s interest coverage has shown a positive trajectory, indicating a solid financial position and the ability to comfortably meet its interest payment obligations through its operating income.
Peer comparison
Dec 31, 2023