Afterpay (Afterpay) Interest Coverage : 0 (At Loss) (As of Jun. 2021)

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What is Afterpay 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. Afterpay's Operating Income for the six months ended in Jun. 2021 was $-56.2 Mil. Afterpay's Interest Expense for the six months ended in Jun. 2021 was $-18.6 Mil. did not have earnings to cover the interest expense. The higher the ratio, the stronger the company's financial strength is.

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

AFTPY's Interest Coverage is not ranked ^*
in the Software industry.
Industry Median: 29.36
* Ranked among companies with meaningful Interest Coverage only.

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

Afterpay Interest Coverage Historical Data

The historical data trend for Afterpay'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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Afterpay Interest Coverage Chart

Afterpay Annual Data

Trend

Jun17

Jun18

Jun19

Jun20

Jun21

Interest Coverage

0.03

Afterpay Semi-Annual Data
	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21
Interest Coverage	Get a 7-Day Free Trial				-	-	0.30	0.05	-

Competitive Comparison of Afterpay's Interest Coverage

For the Software - Infrastructure subindustry, Afterpay'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.

Afterpay's Interest Coverage Distribution in the Software Industry

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

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

Afterpay 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.

Afterpay's Interest Coverage for the fiscal year that ended in Jun. 2021 is calculated as

Here, for the fiscal year that ended in Jun. 2021, Afterpay's Interest Expense was $-26.2 Mil. Its Operating Income was $-55.8 Mil. And its Long-Term Debt & Capital Lease Obligation was $1,007.9 Mil.

Afterpay did not have earnings to cover the interest expense.

Afterpay's Interest Coverage for the quarter that ended in Jun. 2021 is calculated as

Here, for the six months ended in Jun. 2021, Afterpay's Interest Expense was $-18.6 Mil. Its Operating Income was $-56.2 Mil. And its Long-Term Debt & Capital Lease Obligation was $1,007.9 Mil.

Afterpay did not have earnings to cover the interest expense.

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

Afterpay (OTCPK:AFTPY) 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 .

Afterpay Interest Coverage Related Terms

Thank you for viewing the detailed overview of Afterpay's Interest Coverage provided by GuruFocus.com. Please click on the following links to see related term pages.

Afterpay (Afterpay) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » Afterpay Ltd (OTCPK:AFTPY) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

N/A

Address

406 Collins Street, Level 5, Melbourne, VIC, AUS, 3000

Website

https://www.afterpay.com

Afterpay started its buy now, pay later, or BNPL, financing product in calendar 2015, listed on the ASX in May 2016 and merged with Touchcorp (who designed and built Afterpay's platform software) in June 2017. Its BNPL platform allows consumers to make acquisitions at merchant partners by paying instalments every two weeks. If consumers pay on time, they transact on Afterpay for free. Afterpay primarily generates revenue from receiving a margin from the merchant. Afterpay pays the merchant the full purchase price immediately on the sale, less this margin. The margin compensates Afterpay for accepting all non-payment risk, including credit risk and fraud by the consumer, and for encouraging consumers to purchase greater dollar values and transact more frequently.