Paycom Soft (PAYC)

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	474,326	392,114	253,567	185,955	227,027
Interest expense	US$ in thousands	1,927	2,536	1,436	19	940
Interest coverage		246.15	154.62	176.58	9,787.11	241.52

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $474,326K ÷ $1,927K
= 246.15

Paycom Software Inc's interest coverage ratio has shown significant fluctuations over the past five years. In particular, the interest coverage ratio was not calculable for the year ended December 31, 2021.

The interest coverage ratio for the years ended December 31, 2023, and December 31, 2022, were 234.21 and 149.32, respectively, indicating that the company's ability to cover its interest expenses with its operating income has improved over this period.

However, the interest coverage ratio for the year ended December 31, 2020, was extremely high at 9,795.95, which may suggest some abnormality or one-time event affecting the denominator in the calculation.

In comparison, the interest coverage ratio for the year ended December 31, 2019, was 240.66, displaying a more typical level of coverage. Overall, while the interest coverage ratio for Paycom Software Inc has shown volatility, its recent values indicate a solid ability to meet its interest obligations with operating income.