Ciena Corp (CIEN)
Interest coverage
| Nov 2, 2024 | Oct 28, 2023 | Oct 29, 2022 | Oct 30, 2021 | Oct 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 166,617 | 411,679 | 229,555 | 493,588 | 487,282 |
| Interest expense | US$ in thousands | — | 88,026 | 47,050 | 30,837 | 31,321 |
| Interest coverage | — | 4.68 | 4.88 | 16.01 | 15.56 |
November 2, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $166,617K ÷ $—K
= —
Ciena Corp's interest coverage has fluctuated over the past five years, with a noticeable decrease in the most recent fiscal year. The interest coverage ratio indicates the company's ability to meet its interest obligations through its operating income. In the fiscal year ending November 2, 2024, the interest coverage ratio was not provided, which may indicate an anomaly or a change in reporting.
In the preceding fiscal years, the interest coverage ranged from 4.68 to 16.01, which suggests that Ciena Corp generally had sufficient operating income to cover its interest expenses. However, the significant drop from 16.01 in fiscal year 2021 to 15.56 in fiscal year 2020 and further to 4.88 in fiscal year 2022 raise concerns about the company's ability to generate enough operating income to cover its interest costs.
Monitoring the interest coverage ratio is crucial for investors and creditors as it provides insights into the company's financial health and its ability to service its debt. The downward trend observed in Ciena Corp's interest coverage ratio warrants further analysis to understand the underlying reasons behind the decline and assess the company's risk of defaulting on its debt obligations.
Peer comparison
Nov 2, 2024