NetScout Systems Inc (NTCT)

Interest coverage

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	-135,859	78,663	50,940	33,183	22,521
Interest expense	US$ in thousands	8,651	10,248	8,048	10,879	20,597
Interest coverage		-15.70	7.68	6.33	3.05	1.09

March 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $-135,859K ÷ $8,651K
= -15.70

The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations.

Looking at the trend for NetScout Systems Inc's interest coverage over the past five years, we observe fluctuations in the ratio:
- In 2024 (as of March 31), the interest coverage ratio is negative at -15.70, suggesting that the company's operating income is not sufficient to cover its interest expenses. This raises concerns about the company's financial health and ability to meet its debt obligations.
- In 2023, the interest coverage ratio improved significantly to 7.68, indicating that the company's ability to cover its interest expenses has strengthened.
- In 2022 and 2021, the interest coverage ratios were 6.33 and 3.05 respectively, showing a moderately stable performance in covering interest expenses.
- In 2020, the interest coverage ratio was relatively low at 1.09, indicating that the company had minimal margin to cover its interest expenses.

Overall, the negative interest coverage ratio in 2024 raises red flags, while the fluctuations in the preceding years suggest varying levels of financial strength. It is important for investors and stakeholders to carefully monitor NetScout Systems Inc's interest coverage ratio to assess its financial soundness and debt repayment capability.