Paylocity Holdng (PCTY)

Interest coverage

		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	Dec 31, 2019	Sep 30, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	260,093	246,536	220,624	189,126	155,026	124,500	91,501	81,431	84,594	74,868	66,633	64,846	58,043	55,259	63,857	63,620	66,171	69,064	57,535	58,448
Interest expense (ttm)	US$ in thousands	65	130	194	257	286	270	252	235	185	180	178	178	171	168	164	158	154	198	243	288
Interest coverage		4,001.43	1,896.43	1,137.24	735.90	542.05	461.11	363.10	346.51	457.26	415.93	374.34	364.30	339.43	328.92	389.37	402.66	429.68	348.81	236.77	202.94

June 30, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $260,093K ÷ $65K
= 4,001.43

The interest coverage ratio for Paylocity Holdng has fluctuated over the past few quarters, indicating the company's ability to cover its interest expenses with its operating earnings.

In the most recent quarter, as of June 30, 2024, the interest coverage ratio was 4,001.43, which reflects a significant improvement from the previous quarter. This high ratio suggests that Paylocity Holdng is generating substantial earnings relative to its interest expenses, indicating a healthy financial position.

Looking at the trend over the past few quarters, we can see that the interest coverage ratio has generally been increasing, with occasional fluctuations. The company's ability to cover its interest expenses has been strengthening over time, which is a positive indicator of financial stability and profitability.

It is important to note that a higher interest coverage ratio indicates a lower risk of default on debt payments and suggests that the company has the capacity to take on additional debt if needed. Paylocity Holdng's improving interest coverage ratio reflects positively on its financial performance and ability to manage debt obligations effectively.