Perdoceo Education Corp (PRDO)

Interest coverage

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	200,827	192,525	132,631	149,016	143,546
Interest expense	US$ in thousands	613	404	400	920	167
Interest coverage		327.61	476.55	331.58	161.97	859.56

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $200,827K ÷ $613K
= 327.61

The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt obligations. Perdoceo Education Corp's interest coverage ratio has displayed significant fluctuations over time.

As of December 31, 2020, the interest coverage ratio was very high at 859.56, indicating a strong ability to cover interest expenses with earnings. However, by December 31, 2021, this ratio had decreased to 161.97, suggesting a decline in the company's ability to cover its interest costs with operating income.

Subsequently, by December 31, 2022, the interest coverage ratio improved to 331.58, signaling an enhancement in the company's capacity to meet interest obligations. The ratio continued to increase to 476.55 by December 31, 2023, reflecting further improvement in the company's ability to service its debt.

However, by December 31, 2024, the interest coverage ratio fell to 327.61, indicating a slight deterioration in the company's ability to cover interest expenses compared to the previous year.

Overall, the fluctuations in Perdoceo Education Corp's interest coverage ratio over the years suggest varying levels of financial stability and ability to handle interest payments, with the company experiencing both improvements and declines in this aspect. Investors and stakeholders may need to closely monitor these trends to assess the company's financial health and debt servicing capabilities.