NCR Voyix Corporation (VYX)
Interest coverage
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 166,000 | 600,000 | 589,000 | 557,000 | 493,000 | 573,000 | 496,000 | 471,000 | 521,000 | 118,000 | 100,000 | 104,000 | 86,000 | 348,000 | 404,000 | 465,000 | 482,000 | 462,000 | 415,000 | 139,000 |
| Interest expense (ttm) | US$ in thousands | 294,000 | 338,000 | 329,000 | 305,000 | 285,000 | 268,000 | 262,000 | 256,000 | 238,000 | 225,000 | 217,000 | 213,000 | 218,000 | 221,000 | 214,000 | 202,000 | 197,000 | 186,000 | 176,000 | 172,000 |
| Interest coverage | 0.56 | 1.78 | 1.79 | 1.83 | 1.73 | 2.14 | 1.89 | 1.84 | 2.19 | 0.52 | 0.46 | 0.49 | 0.39 | 1.57 | 1.89 | 2.30 | 2.45 | 2.48 | 2.36 | 0.81 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $166,000K ÷ $294,000K
= 0.56
The interest coverage ratio reflects NCR Voyix Corporation's ability to meet its interest obligations with its operating earnings. A lower ratio indicates a higher financial risk, as it implies that the company may have difficulty covering interest expenses.
The trend in NCR Voyix Corporation's interest coverage ratio shows fluctuation over the periods in consideration. The ratio has generally been below 2, indicating that the company may have had challenges meeting its interest payments from its operating profits alone. This suggests a relatively higher risk of default on interest payments.
The company experienced a significant decline in interest coverage at the end of 2021, with the ratio dropping to as low as 0.39 in March 2021. This suggests a particularly precarious financial position at that time, where the company's operating earnings were insufficient to cover its interest expenses.
While there have been some periods with improved ratios, such as spikes in coverage in early 2020 and mid-2022, the overall trend over the periods analyzed indicates a recurring issue with maintaining adequate interest coverage.
In conclusion, NCR Voyix Corporation's interest coverage ratio analysis highlights the company's struggle to consistently generate enough operating income to comfortably cover its interest obligations, signaling potential financial stress and risk of default on interest payments.