R1 RCM Inc (RCM)
Interest coverage
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | ||
|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 147,900 | 64,800 | 28,400 | -43,000 |
| Interest expense (ttm) | US$ in thousands | 5,700 | 5,700 | 5,700 | 11,200 |
| Interest coverage | 25.95 | 11.37 | 4.98 | -3.84 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $147,900K ÷ $5,700K
= 25.95
The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt with its operating income. A higher interest coverage ratio indicates a stronger ability to cover interest expenses.
Analyzing the interest coverage ratio of R1 RCM Inc. over the past eight quarters reveals fluctuations in the company's ability to cover its interest payments. In the most recent quarter (Q4 2023), the interest coverage ratio was 2.08, indicating that the company generated 2.08 times the operating income needed to cover its interest expenses. This represents a slight improvement from the previous quarter (Q3 2023) where the ratio was 1.85.
Looking further back, the interest coverage ratio has been declining over the past year. In Q1 2022, the ratio was 10.27, showing a significantly higher ability to cover interest expenses compared to the latest quarter. The decreasing trend in the ratio could signal potential concerns about the company's ability to service its debt obligations in the long term.
Overall, the analysis of R1 RCM Inc.'s interest coverage ratio suggests a fluctuating trend with a recent improvement compared to the previous quarter but a decrease from levels seen in the previous year. Further monitoring of the company's financial performance and debt management strategies may be necessary to assess its ability to meet interest payments effectively.
Peer comparison
Dec 31, 2023