Alpha and Omega Semiconductor Ltd (AOSL)

The interest coverage ratio for Alpha and Omega Semiconductor Ltd, as reflected in the provided data, demonstrates notable fluctuations over the specified period from June 30, 2021, to June 30, 2025. As of June 30, 2021, the company exhibited a robust interest coverage ratio of 10.16, indicating a strong ability to meet interest obligations through its earnings. This elevated ratio suggests effective earnings generation relative to interest expenses during that time.

The subsequent year, June 30, 2022, saw a marked improvement in the company's interest coverage, reaching 26.03. This substantial increase signifies an even stronger capacity to cover interest costs, likely driven by improved earnings or reduced interest expenses, reflecting a highly favorable financial position at that point.

In the following year, June 30, 2023, the interest coverage ratio moderated slightly to 20.73. Although lower than the previous year's peak, it remains significantly above the generally acceptable threshold, signaling continued strong earnings relative to interest commitments.

However, a notable decline is observed in the years ahead. By June 30, 2024, the ratio turns negative at -3.17, indicating that the company's earnings before interest and taxes (EBIT) were insufficient to cover interest expenses, suggesting financial distress or deteriorating profitability. This negative figure implies that interest expenses surpassed earnings, raising concerns about the company's ability to meet interest obligations solely from operational performance.

The trend further worsens by June 30, 2025, with the ratio declining to -10.78, demonstrating an ongoing and substantial inability to service interest costs from operational earnings. This persistent negative trend reflects significant financial challenges, potentially indicative of declining profitability, increased debt levels, or other financial stresses impacting the company's capacity to cover interest expenses from earnings.

In summary, the data reveals a trajectory that initially exhibited strong interest coverage, which peaked and remained high in 2022 and 2023, before transitioning into negative territory in 2024 and 2025. The shift from positive to negative interest coverage ratios serves as a critical indicator of deteriorating financial health and warrants further investigation into underlying causes and potential risks faced by the company.

Peer comparison

Jun 30, 2025