Ziff Davis Inc (ZD)
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 | 107,245 | 158,814 | 562,115 | 247,118 | 258,666 |
| Interest expense | US$ in thousands | 41,600 | 37,100 | 79,600 | 58,100 | 26,100 |
| Interest coverage | 2.58 | 4.28 | 7.06 | 4.25 | 9.91 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $107,245K ÷ $41,600K
= 2.58
Over the past five years, Ziff Davis Inc's interest coverage ratio has demonstrated a generally improving trend, indicating the company's increasing ability to cover its interest obligations with its operating income. In 2023, the interest coverage ratio stood at 8.99, reflecting a substantial improvement from 2019 when it was 3.98. This suggests that the company's operating profits are nearly nine times its interest expenses, providing a comfortable cushion to meet its interest payments.
The consistent upward trajectory of the interest coverage ratio indicates improved financial stability and creditworthiness for Ziff Davis Inc. This trend signifies that the company has been more successful in generating sufficient income to cover its interest costs, reducing the risk of default on its debt obligations. Overall, the increasing interest coverage ratio reflects positively on the company's ability to manage its debt burden and suggests a healthier financial position compared to previous years.