Teradata Corp (TDC)
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 | 193,000 | 147,000 | 91,000 | 86,000 | 3,000 |
| Interest expense | US$ in thousands | 29,000 | 30,000 | 24,000 | 26,000 | 27,000 |
| Interest coverage | 6.66 | 4.90 | 3.79 | 3.31 | 0.11 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $193,000K ÷ $29,000K
= 6.66
Teradata Corp's interest coverage has shown a significant improvement over the years. As of December 31, 2020, the interest coverage ratio was only 0.11, indicating that the company had minimal earnings available to cover its interest expenses. However, by December 31, 2024, the interest coverage ratio had increased substantially to 6.66, signaling a much healthier financial position.
This upward trend in interest coverage suggests that Teradata Corp has been able to generate more income relative to its interest expenses, which is a positive sign of financial stability and profitability. It indicates that the company is more capable of meeting its interest obligations using its operating earnings, reducing the risk of default.
Overall, the improving interest coverage ratio reflects positively on Teradata Corp's ability to manage its debt obligations and indicates a strengthening financial performance over the years.
Peer comparison
Dec 31, 2024