Benchmark Electronics Inc (BHE)

Interest coverage

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	110,817	111,792	118,896	117,604	113,095	113,760	106,515	103,828	97,236	83,880	69,473	57,299	53,879	47,073	43,909	31,053	25,657	4,873	6,017	21,372
Interest expense (ttm)	US$ in thousands	26,922	29,439	31,345	32,670	31,875	28,649	23,667	17,594	12,894	9,685	8,179	8,073	8,472	8,390	8,539	8,811	8,364	7,839	7,390	6,757
Interest coverage		4.12	3.80	3.79	3.60	3.55	3.97	4.50	5.90	7.54	8.66	8.49	7.10	6.36	5.61	5.14	3.52	3.07	0.62	0.81	3.16

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $110,817K ÷ $26,922K
= 4.12

Benchmark Electronics Inc's interest coverage ratio has fluctuated over the past few years, indicating varying levels of the company's ability to cover its interest expenses with its earnings before interest and taxes (EBIT).

The interest coverage ratio stood at 3.16 as of March 31, 2020, suggesting the company generated earnings over three times its interest expenses during that period. However, this ratio dropped to 0.81 by June 30, 2020, indicating a significant decline in the company's ability to cover its interest obligations.

Subsequently, there was a further decrease in the interest coverage ratio to 0.62 as of September 30, 2020, signaling a potential strain on Benchmark Electronics Inc's financial health. However, the ratio started to improve in the following quarters, reaching 3.07 by December 31, 2020, and then increasing steadily over the next few quarters.

By December 31, 2022, the interest coverage ratio had increased to 7.54, reflecting a significant improvement in the company's ability to meet its interest payments. The ratio peaked at 8.66 as of September 30, 2022, indicating a strong financial position and robust earnings relative to interest expenses.

However, the interest coverage ratio started declining from that point onwards, reaching 3.55 by December 31, 2023, and further dropping to 3.60 as of March 31, 2024. This downward trend continued, with the ratio remaining relatively stable around 3.7-3.8 for the next few quarters.

Overall, Benchmark Electronics Inc's interest coverage ratio has shown fluctuations over the years, with periods of both strength and weakness. It is essential for investors and analysts to monitor this ratio closely to assess the company's financial stability and its ability to meet its debt obligations in the long term.