Ziff Davis Inc (ZD)
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 | 132,611 | 145,349 | 187,702 | 194,694 | 198,941 | 190,877 | 206,853 | 171,021 | 167,340 | 14,561 | 46,989 | 109,974 | 138,340 | 127,113 | 109,034 | 92,608 | 88,223 | 253,519 | 251,217 | 248,986 |
| Interest expense (ttm) | US$ in thousands | 20,031 | 23,203 | 28,946 | 25,419 | 32,449 | 43,836 | 55,138 | 69,585 | 79,779 | 129,065 | 131,915 | 132,708 | 131,975 | 84,800 | 79,359 | 74,498 | 69,546 | 66,184 | 64,088 | 62,255 |
| Interest coverage | 6.62 | 6.26 | 6.48 | 7.66 | 6.13 | 4.35 | 3.75 | 2.46 | 2.10 | 0.11 | 0.36 | 0.83 | 1.05 | 1.50 | 1.37 | 1.24 | 1.27 | 3.83 | 3.92 | 4.00 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $132,611K ÷ $20,031K
= 6.62
Interest coverage is a key financial ratio used to evaluate a company's ability to meet its interest obligations on outstanding debt. It is calculated by dividing the earnings before interest and taxes (EBIT) by the interest expense. A higher interest coverage ratio indicates that the company is more capable of servicing its debt.
Analyzing the interest coverage ratio of Ziff Davis Inc over the past eight quarters reveals a positive trend in the company's ability to cover its interest payments. In Q4 2023, the interest coverage ratio stood at 8.99, the highest among the quarters presented, indicating a strong ability to meet interest obligations. This represents an improvement from the previous quarter where the ratio was 7.92.
The trend over the past two years shows fluctuations in the interest coverage ratio, with notable increases observed in Q4 2022 (6.46) compared to Q3 2022 (2.03). This significant improvement suggests that the company's earnings performance had strengthened, enabling it to cover its interest expenses more comfortably.
Overall, the consistent upward trend in the interest coverage ratio of Ziff Davis Inc indicates an improved financial position and ability to meet its interest obligations. Investors and creditors may view this positively as it reflects a lower risk of default and a stronger financial health of the company.