Paylocity Holdng (PCTY)

Interest coverage

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	260,093	155,026	84,594	58,043	66,171
Interest expense	US$ in thousands	—	286	185	171	154
Interest coverage		—	542.05	457.26	339.43	429.68

June 30, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $260,093K ÷ $—K
= —

The interest coverage ratio for Paylocity Holdng has been showing a positive trend over the past five years, indicating an improving ability to cover interest expenses with operating income. The ratio stood at 542.05 in 2023, significantly higher than the previous year, implying a strong capacity to meet interest payments. This suggests that the company had a comfortable margin of safety in paying interest on its debt obligations, reflecting favorable financial health and stability. The consistent increase in interest coverage from 2020 to 2023 points towards effective management of debt and an efficient utilization of resources to generate profits. However, the absence of data for 2024 hinders a complete analysis, making it essential to monitor future performance to gauge the company's continued ability to cover interest payments.