Strategic Education Inc (STRA)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 157,276 | 113,121 | 73,992 | 110,585 | 135,536 |
| Interest expense | US$ in thousands | — | 7,200 | 7,655 | 3,600 | 1,400 |
| Interest coverage | — | 15.71 | 9.67 | 30.72 | 96.81 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $157,276K ÷ $—K
= —
Based on the provided data, Strategic Education Inc's interest coverage ratio has seen a declining trend over the years. In December 31, 2020, the interest coverage ratio was 96.81, indicating a very strong ability to cover interest expenses. However, this ratio decreased significantly to 30.72 by December 31, 2021, and continued to decline to 9.67 by December 31, 2022.
The drastic drop in the interest coverage ratio from 2020 to 2022 suggests that the company may be facing challenges in generating enough operating income to cover its interest expenses.
By December 31, 2023, the interest coverage ratio improved to 15.71, indicating a slight recovery in the company's ability to cover its interest obligations. However, the lack of data for December 31, 2024, makes it difficult to assess the current status of the interest coverage ratio.
Overall, the declining trend in the interest coverage ratio raises concerns about Strategic Education Inc's financial health and its ability to meet interest payments using its operating income. It is crucial for the company to closely monitor and improve its interest coverage ratio to ensure financial stability and sustainability in the long term.
Peer comparison
Dec 31, 2024