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.