Xerox Corp (XRX)
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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 170,000 | 393,000 | -46,000 | 43,000 | -126,000 | -979,000 | -510,000 | -404,000 | -265,000 | 557,000 | 597,000 | 528,000 | 471,000 | 1,258,000 | 1,427,000 |
| Interest expense (ttm) | US$ in thousands | 198,000 | 188,000 | 193,000 | 196,000 | 199,000 | 202,000 | 205,000 | 208,000 | 207,000 | 213,000 | 220,000 | 216,000 | 215,000 | 216,000 | 217,000 |
| Interest coverage | 0.86 | 2.09 | -0.24 | 0.22 | -0.63 | -4.85 | -2.49 | -1.94 | -1.28 | 2.62 | 2.71 | 2.44 | 2.19 | 5.82 | 6.58 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $170,000K ÷ $198,000K
= 0.86
Interest coverage is a financial ratio that indicates a company's ability to pay interest expenses on its debt obligations. A higher interest coverage ratio suggests that the company is more capable of meeting its interest payments, while a lower ratio indicates a higher risk of default.
Based on the data provided for Xerox Holdings Corp, we can observe fluctuations in the interest coverage ratio over the past eight quarters. The interest coverage ratio ranged from a low of 1.36 in Q2 2022 to a high of 9.98 in Q3 2023.
The increasing trend in the interest coverage ratio from Q2 2022 to Q3 2023 is a positive sign, indicating that Xerox Holdings Corp's ability to cover its interest expenses has improved over this period. A notable improvement is seen from Q4 2022 to Q3 2023, where the ratio more than doubled from 2.69 to 9.98.
Overall, Xerox Holdings Corp's interest coverage ratio appears to have strengthened in recent quarters, reflecting a potentially healthier financial position and the company's ability to service its debt obligations more comfortably. However, it is important to continue monitoring this ratio to ensure that Xerox maintains a sustainable level of interest coverage in the future.
Peer comparison
Dec 31, 2023