ReadyTech Holdings (ASX:RDY) Interest Coverage : 2.93 (As of Dec. 2023)

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What is ReadyTech Holdings Interest Coverage?

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income by its Interest Expense. ReadyTech Holdings's Operating Income for the six months ended in Dec. 2023 was A$5.1 Mil. ReadyTech Holdings's Interest Expense for the six months ended in Dec. 2023 was A$-1.7 Mil. ReadyTech Holdings's interest coverage for the quarter that ended in Dec. 2023 was 2.93. The higher the ratio, the stronger the company's financial strength is.

The historical rank and industry rank for ReadyTech Holdings's Interest Coverage or its related term are showing as below:

ASX:RDY' s Interest Coverage Range Over the Past 10 Years
Min: 3.69 Med: 6.42 Max: 11.67
Current: 3.69

ASX:RDY's Interest Coverage is ranked worse than
82.92% of 1604 companies
in the Software industry
Industry Median: 28.885 vs ASX:RDY: 3.69

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

ReadyTech Holdings Interest Coverage Historical Data

The historical data trend for ReadyTech Holdings's Interest Coverage can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.

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ReadyTech Holdings Interest Coverage Chart

ReadyTech Holdings Annual Data

Trend

Jun19

Jun20

Jun21

Jun22

Jun23

Interest Coverage

6.34

6.49

11.67

4.00

ReadyTech Holdings Semi-Annual Data
	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
Interest Coverage	Get a 7-Day Free Trial						11.99	11.44	3.10	4.70	2.93

Competitive Comparison of ReadyTech Holdings's Interest Coverage

For the Software - Application subindustry, ReadyTech Holdings's Interest Coverage, along with its competitors' market caps and Interest Coverage data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

ReadyTech Holdings's Interest Coverage Distribution in the Software Industry

For the Software industry and Technology sector, ReadyTech Holdings's Interest Coverage distribution charts can be found below:

* The bar in red indicates where ReadyTech Holdings's Interest Coverage falls into.

ReadyTech Holdings Interest Coverage Calculation

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

If Interest Expense is negative and Operating Income is positive, then

Interest Coverage

-1

Operating Income

Interest Expense

Else if Interest Expense is negative and Operating Income is negative, then

The company did not have earnings to cover the interest expense.

Else if Interest Expense is 0 and Long-Term Debt & Capital Lease Obligation is 0, then

The company had no debt ⁽¹⁾.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

ReadyTech Holdings's Interest Coverage for the fiscal year that ended in Jun. 2023 is calculated as

Here, for the fiscal year that ended in Jun. 2023, ReadyTech Holdings's Interest Expense was A$-2.3 Mil. Its Operating Income was A$9.3 Mil. And its Long-Term Debt & Capital Lease Obligation was A$50.9 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Jun. 2023 )	/	Interest Expense (A: Jun. 2023 )
	=	-1	*	9.345	/	-2.337
	=	4.00

ReadyTech Holdings's Interest Coverage for the quarter that ended in Dec. 2023 is calculated as

Here, for the six months ended in Dec. 2023, ReadyTech Holdings's Interest Expense was A$-1.7 Mil. Its Operating Income was A$5.1 Mil. And its Long-Term Debt & Capital Lease Obligation was A$47.0 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Dec. 2023 )	/	Interest Expense (Q: Dec. 2023 )
	=	-1	*	5.092	/	-1.736
	=	2.93

The higher the ratio, the stronger the company's Financial Strength is.

ReadyTech Holdings (ASX:RDY) Interest Coverage Explanation

Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.

Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .

ReadyTech Holdings Interest Coverage Related Terms

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ReadyTech Holdings (ASX:RDY) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » ReadyTech Holdings Ltd (ASX:RDY) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

N/A

Address

77 King Street, Level 2, Sydney, NSW, AUS, 2000

Website

https://www.readytech.com.au

ReadyTech Holdings Ltd is a provider of people management software for educators, employers, and facilitators of career transitions. Its products are JR Plus, A2E, HR3, ePayroll, JR Gov, Aussiepay, and others. The company's operating segments include Education and Work pathways, Workforce Solutions, and Government and Justice. It generates maximum revenue from the Education segment. The education segment mainly provides products and services to tertiary education providers. Its Workforce segment provides products and services to a mid-sized company across various industries. The Government division provides government and justice case management software as a service solution to local governments, state governments and justice departments.