PTC Inc (PTC)

Interest coverage

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	588,615	461,983	451,366	442,233	211,134
Interest expense	US$ in thousands	119,653	129,417	54,268	50,478	76,428
Interest coverage		4.92	3.57	8.32	8.76	2.76

September 30, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $588,615K ÷ $119,653K
= 4.92

The interest coverage ratio for PTC Inc has fluctuated over the last five years. In 2024, the interest coverage ratio was 4.92, indicating that the company generated enough operating income to cover its interest expenses nearly five times over. This suggests that PTC Inc has a comfortable buffer to meet its interest obligations.

Compared to the previous year, the interest coverage ratio in 2023 was lower at 3.57, which could raise a slight concern about the company's ability to meet its interest payments from operating income. However, in 2022, the interest coverage ratio increased significantly to 8.32, indicating a much stronger ability to cover interest expenses.

The company's interest coverage ratio was also strong in 2021 and 2020, at 8.76 and 2.76 respectively. The higher coverage ratios in these years suggest that PTC Inc was able to comfortably manage its interest expenses and had sufficient operating income to cover its financial obligations.

Overall, while there has been some variability in the interest coverage ratio over the past five years, PTC Inc generally demonstrates a reasonable ability to meet its interest payments through its operating income. It is important for stakeholders to monitor this ratio to ensure the company's financial health and ability to service its debt obligations effectively.