Progress Software Corporation (PRGS)

Interest coverage

		Nov 30, 2024	Aug 31, 2024	May 31, 2024	Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020	Feb 29, 2020
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	123,948	124,506	113,641	109,616	110,437	119,577	121,784	139,162	133,045	122,466	136,792	117,956	115,579	114,065	100,581	103,976	106,805	81,116	64,146	53,720
Interest expense (ttm)	US$ in thousands	19,668	16,658	20,802	32,276	30,780	27,316	22,793	17,935	15,790	17,788	20,289	21,234	20,045	16,103	11,895	9,892	10,170	10,685	11,704	11,316
Interest coverage		6.30	7.47	5.46	3.40	3.59	4.38	5.34	7.76	8.43	6.88	6.74	5.56	5.77	7.08	8.46	10.51	10.50	7.59	5.48	4.75

November 30, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $123,948K ÷ $19,668K
= 6.30

Progress Software Corporation's interest coverage ratio has shown fluctuations over the past several periods.

The interest coverage ratio, which measures the company's ability to meet its interest payments from its operating income, stood at 4.75 as of February 29, 2020. Subsequently, the ratio improved steadily to reach a peak of 10.51 on February 28, 2021, suggesting a strong ability to cover interest expenses.

However, the interest coverage ratio started to decline after February 2021, dropping to 5.34 by May 31, 2023, and further decreasing to 3.40 by February 29, 2024. These lower ratios indicate that Progress Software Corporation may be experiencing challenges in meeting its interest obligations from its operating income.

It is important for investors and creditors to closely monitor the company's interest coverage ratio to assess its financial health and ability to service its debt effectively.