ADEIA CORP (ADEA)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 136,230 | 153,060 | 119,028 | 267,455 |
| Interest expense | US$ in thousands | 62,574 | 45,335 | 38,973 | 37,873 |
| Interest coverage | 2.18 | 3.38 | 3.05 | 7.06 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $136,230K ÷ $62,574K
= 2.18
ADEIA CORP's interest coverage ratio has experienced a decreasing trend over the past four years, declining from 7.06 in 2020 to 2.18 in 2023. This indicates that the company's ability to cover its interest expenses with its operating income has weakened over time. A decreasing interest coverage ratio may suggest a potential inability to meet interest obligations from operating earnings, posing a risk in terms of financial stability and debt repayment capacity. Further investigation into the company's financial health and ability to generate sufficient profits to meet its interest payments is warranted to assess the sustainability of its current financial position.
Peer comparison
Dec 31, 2023