PayPal Holdings (NAS:PYPL) Interest Coverage

: 13.30 (As of Jun. 2023)

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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. PayPal Holdings's Operating Income for the three months ended in Jun. 2023 was $1,157 Mil. PayPal Holdings's Interest Expense for the three months ended in Jun. 2023 was $-87 Mil. PayPal Holdings's interest coverage for the quarter that ended in Jun. 2023 was 13.30. The higher the ratio, the stronger the company's financial strength is.

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

PYPL' s Interest Coverage Range Over the Past 10 Years
Min: 13.3 Med: 32.51 Max: No Debt
Current: 13.61

PYPL's Interest Coverage is ranked worse than
70.22% of 178 companies
in the Credit Services industry
Industry Median: 445.20 vs PYPL: 13.61

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

PayPal Holdings Interest Coverage Historical Data

The historical data trend for PayPal 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.

* Premium members only.

PayPal Holdings Annual Data

Trend

Dec13

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Interest Coverage

32.51

24.26

16.40

18.64

13.30

PayPal Holdings Quarterly Data
	Sep18	Dec18	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23
Interest Coverage																12.38	13.49	14.26	13.37	13.30

Competitive Comparison

For the Credit Services subindustry, PayPal 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.

Annual Data Quarterly Data

PayPal Holdings Interest Coverage Distribution

For the Credit Services industry and Financial Services sector, PayPal Holdings's Interest Coverage distribution charts can be found below:

* The bar in red indicates where PayPal Holdings's Interest Coverage falls in comparison to its industry or sector. The grey bar indicates the Interest Coverage's extreme value range as defined by GuruFocus.

PayPal 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.

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

PayPal Holdings's Interest Coverage for the fiscal year that ended in Dec. 2022 is calculated as

Here, for the fiscal year that ended in Dec. 2022, PayPal Holdings's Interest Expense was $-304 Mil. Its Operating Income was $4,044 Mil. And its Long-Term Debt & Capital Lease Obligation was $10,417 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Dec. 2022 )	/	Interest Expense (A: Dec. 2022 )
	=	-1	*	4044	/	-304
	=	13.30

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

Here, for the three months ended in Jun. 2023, PayPal Holdings's Interest Expense was $-87 Mil. Its Operating Income was $1,157 Mil. And its Long-Term Debt & Capital Lease Obligation was $10,549 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Jun. 2023 )	/	Interest Expense (Q: Jun. 2023 )
	=	-1	*	1157	/	-87
	=	13.30

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

PayPal Holdings (NAS:PYPL) 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 .

PayPal Holdings Interest Coverage Related Terms

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

PayPal Holdings (NAS:PYPL) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Credit Services » PayPal Holdings Inc (NAS:PYPL) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

PYPL:Peru PYPL:Mexico PYPL_KZ:Kazakhstan 2PPd:UK 0R9U:UK 2PP:Germany PYPL:Canada PYPL34:Brazil PYPL:Austria PYPL:Argentina

Address

2211 North First Street, San Jose, CA, USA, 95131

Website

https://www.paypal.com

PayPal was spun off from eBay in 2015 and provides electronic payment solutions to merchants and consumers, with a focus on online transactions. The company had 435 million active accounts at the end of 2022. The company also owns Venmo, a person-to-person payment platform.

Executives

John C. Kim	officer: EVP, Chief Product Officer	C/O OWLET, INC., 2500 EXECUTIVE PARKWAY, SUITE 500, LEHI UT 84043
Gabrielle Scheibe	officer: See Remarks	2211 NORTH FIRST STREET, SAN JOSE CA 95131
Blake J Jorgensen	officer: EVP, Chief Financial Officer	209 REDWOOD SHORES PARKWAY, REDWOOD CITY CA 94065
Enrique Lores	director	3000 HANOVER STREET, PALO ALTO CA 94304
Jeffrey William Karbowski	officer: VP, Chief Accounting Officer	121 ALBRIGHT WAY, LOS GATOS CA 95032
Peggy Alford	officer: EVP, Global Sales	435 TASSO STREET, PALO ALTO CA 94301
John D Rainey	officer: CFO and EVP, Global Cust Oper	C/O PAYPAL HOLDINGS, INC., 2211 NORTH FIRST STREET, SAN JOSE CA 95131
Allison Johnson	officer: EVP, Chief Marketing Officer	C/O PAYPAL HOLDINGS INC, 2211 NORTH FIRST STREET, SAN JOSE CA 95131
Mark Britto	officer: EVP, Global Sales and Credit	C/O PAYPAL HOLDINGS, INC., 2211 NORTH FIRST STREET, SAN JOSE CA 95131
Deborah M. Messemer	director	C/O ALLOGENE THERAPEUTICS, INC., 210 EAST GRAND AVENUE, SOUTH SAN FRANCISCO CA 94080
Rodney C Adkins	director	55 GLENLAKE PARKWAY, NE, ATLANTA GA 30328
Ann Sarnoff	director	C/O HSN, INC., 1 HSN DRIVE, SAINT PETERSBURG FL 33729
Aaron Karczmer	officer: SVP, CR & Compliance Officer	PAYPAL HOLDINGS, INC., 2211 NORTH FIRST STREET, SAN JOSE CA 95131
Belinda J. Johnson	director	394 PACIFIC AVENUE, FLOOR 2, SAN FRANCISCO CA 94111
Sripada Shivananda	officer: SVP, Chief Technology Officer	2211 NORTH FIRST STREET, 2211 NORTH FIRST STREET, SAN JOSE CA 95131