Cadence Design Systems Inc (CDNS)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,318,110 | 1,068,300 | 785,415 | 653,497 | 497,797 |
| Interest expense | US$ in thousands | 36,185 | 22,934 | 16,980 | 20,749 | 18,829 |
| Interest coverage | 36.43 | 46.58 | 46.26 | 31.50 | 26.44 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,318,110K ÷ $36,185K
= 36.43
The interest coverage ratio for Cadence Design Systems, Inc. has shown consistently strong improvement over the past five years, reflecting the company's ability to comfortably meet its interest obligations from its operating income. The interest coverage ratio has increased from 53.69 in 2019 to 192.77 in 2023, indicating a significant enhancement in the company's ability to cover its interest expenses. This trend suggests that the company's earnings before interest and taxes (EBIT) have risen substantially relative to its interest expenses, showing a favorable creditworthiness and financial stability position. Overall, the steady growth in the interest coverage ratio reflects Cadence Design Systems, Inc.'s sound financial management and profitability performance.
Peer comparison
Dec 31, 2023