Cadence Design Systems Inc (CDNS)

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	1,440,136	1,311,336	1,262,749	1,272,807	1,284,819	1,166,667	1,115,390	1,085,015	1,068,297	1,046,995	982,151	892,806	782,437	772,775	750,360	718,563	649,014	573,741	522,432	499,050
Interest expense (ttm)	US$ in thousands	75,999	55,081	39,645	35,617	36,185	36,278	32,682	28,086	22,934	18,103	16,836	16,871	16,980	17,602	18,731	20,329	20,749	20,098	19,013	18,075
Interest coverage		18.95	23.81	31.85	35.74	35.51	32.16	34.13	38.63	46.58	57.84	58.34	52.92	46.08	43.90	40.06	35.35	31.28	28.55	27.48	27.61

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,440,136K ÷ $75,999K
= 18.95

Cadence Design Systems Inc's interest coverage has shown a consistently positive trend over the analysis period starting from March 31, 2020, where it was 27.61, and peaking at 58.34 on June 30, 2022. This steady improvement indicates that the company has been effectively generating enough operating income to comfortably cover its interest expenses. However, there has been a slight decline in the interest coverage ratio in the subsequent periods, falling to 18.95 as of December 31, 2024. This decrease may suggest a potential increase in the company's debt burden or a reduction in its operating income relative to its interest expenses. Overall, despite the recent decline, Cadence Design Systems Inc's interest coverage has historically been strong, reflecting its ability to manage its debt obligations.