Progress Software Corporation (PRGS)

Interest coverage

		Nov 30, 2024	Nov 30, 2023	Nov 30, 2022	Nov 30, 2021	Nov 30, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	124,003	110,437	133,045	115,579	106,805
Interest expense	US$ in thousands	32,012	30,780	15,790	20,045	10,170
Interest coverage		3.87	3.59	8.43	5.77	10.50

November 30, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $124,003K ÷ $32,012K
= 3.87

Progress Software Corporation's interest coverage ratio has exhibited fluctuations over the past five years. In November 2020, the interest coverage ratio stood at a healthy 10.50, indicating that the company generated more than enough operating income to cover its interest expenses comfortably. However, this ratio declined in the subsequent years, dropping to 5.77 in November 2021, which may suggest a potential decrease in the company's ability to cover its interest payments with its operating income.

Despite this decline, Progress Software Corporation's interest coverage ratio improved in November 2022 to 8.43, indicating a better ability to service its debt obligations with operating earnings. However, the ratio experienced another decline in November 2023 to 3.59, raising concerns about the company's ability to cover its interest expenses adequately.

In the most recent period of November 2024, the interest coverage ratio slightly increased to 3.87. Though there was a marginal improvement, the ratio remains relatively low, implying that Progress Software Corporation may still be at risk of facing challenges in meeting its interest payments from its operating income alone.

Overall, the trend in Progress Software Corporation's interest coverage ratio shows a mix of fluctuations, with periods of strong coverage followed by declines. Investors and stakeholders should continue to monitor this ratio closely to assess the company's financial health and ability to manage its debt obligations effectively.