Perdoceo Education Corp (PRDO)

Interest coverage

Dec 31, 2024 Sep 30, 2024 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
Earnings before interest and tax (EBIT) (ttm) US$ in thousands 190,325 168,687 164,428 166,443 162,441 166,390 147,529 132,844 132,631 141,767 150,304 152,092 149,016 151,359 145,572 148,114 145,412 142,135 141,455 104,772
Interest expense (ttm) US$ in thousands 613 645 660 644 404 390 389 392 400 339 815 996 1,002 1,002 472 235 167 168 169 166
Interest coverage 310.48 261.53 249.13 258.45 402.08 426.64 379.25 338.89 331.58 418.19 184.42 152.70 148.72 151.06 308.42 630.27 870.73 846.04 837.01 631.16

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $190,325K ÷ $613K
= 310.48

Perdoceo Education Corp's interest coverage ratio has fluctuated over the period from March 31, 2020, to December 31, 2024. The interest coverage ratio measures the company's ability to meet its interest obligations on debt. A higher ratio indicates that the company is more capable of servicing its debt.

The interest coverage ratio for Perdoceo Education Corp started strong in March 2020 at 631.16, indicating a comfortable ability to cover interest payments. This ratio increased further by June 2020 to 837.01 and stayed relatively high throughout the rest of 2020 and the first half of 2021, with figures above 800.

However, a significant decline in the interest coverage ratio was observed in the second half of 2021, with values dropping to around 150 by December 2021 and remaining low in the first half of 2022. This sharp decrease suggests a potential strain on the company's ability to cover interest expenses.

From September 2022 to December 2024, the interest coverage ratio showed fluctuations but generally improved, reaching around 300-400 by the end of the period. While the ratio remained lower than the earlier peak levels, the upward trend indicates an enhanced ability to pay interest obligations compared to the lowest points in 2021 and early 2022.

Overall, the analysis of Perdoceo Education Corp's interest coverage ratio suggests a mix of strengths and weaknesses in managing its interest-bearing debt. The company experienced periods of robust coverage, followed by challenges, and ultimately displayed a recovery in its ability to meet interest payments towards the end of the period under review.