Thryv Holdings Inc (THRY)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 70,030 | 261,604 | 190,013 | 152,013 | 152,892 |
| Interest expense | US$ in thousands | 61,728 | 60,407 | 66,374 | 68,539 | 92,951 |
| Interest coverage | 1.13 | 4.33 | 2.86 | 2.22 | 1.64 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $70,030K ÷ $61,728K
= 1.13
Thryv Holdings Inc's interest coverage ratio has been fluctuating over the past four years. In 2023, the interest coverage ratio deteriorated to 1.12, indicating a decline in the company's ability to cover its interest expenses with operating income. This could raise concerns about the company's financial health and its ability to meet its debt obligations.
Comparing this to the previous years, in 2022 the interest coverage ratio was at a relatively healthier level of 3.34, reflecting a higher ability to pay interest obligations from operating income. This positive trend continued from 2021, where the ratio was 2.92, and 2020, where the ratio stood at 2.58.
The significant drop in the interest coverage ratio from 2022 to 2023 suggests a potential increase in the company's financial risk and may warrant further investigation into the reasons behind this decline. Monitoring this ratio going forward will be crucial to assess Thryv Holdings Inc's ability to manage its debt and interest obligations effectively.