Coherent Inc (COHR)
Interest coverage
| Jun 30, 2025 | Jun 30, 2024 | Sep 30, 2023 | Jun 30, 2023 | Sep 30, 2022 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | — | 123,175 | 50,415 | -68,686 | 116,282 |
| Interest expense | US$ in thousands | 243,300 | 288,475 | 286,872 | 286,872 | 121,254 |
| Interest coverage | 0.00 | 0.43 | 0.18 | -0.24 | 0.96 |
June 30, 2025 calculation
Interest coverage = EBIT ÷ Interest expense
= $—K ÷ $243,300K
= 0.00
The interest coverage ratio for Coherent Inc. demonstrates significant fluctuations over the specified periods, indicating varying capabilities in meeting interest obligations from operating earnings. As of September 30, 2022, the ratio was approximately 0.96, suggesting that the company was just able to cover its interest expenses with its operating income, although the margin was marginal and close to the critical threshold of 1.0.
By June 30, 2023, the ratio declined sharply into negative territory at -0.24, signifying that the company's operating income had fallen short of covering interest expenses, thus raising concerns over financial flexibility and potential liquidity challenges. This negative figure indicates that the company's earnings were not sufficient to cover interest obligations during that period, potentially reflecting operational difficulties, increased interest costs, or other financial pressures.
The subsequent period, ending September 30, 2023, shows a modest recovery with the interest coverage ratio rising to 0.18. Although positive, this level remains below the generally acceptable threshold and indicates limited capacity to comfortably meet interest expenses solely from operating income.
Projected data for June 30, 2024, indicates a further improvement with the ratio reaching 0.43. While indicative of a strengthening ability to cover interest payments, the ratio still falls considerably short of the ideal benchmark of at least 1.0, suggesting the company’s earnings are still insufficient for full coverage, albeit on a positive trajectory.
Looking ahead to June 30, 2025, the ratio is forecasted to reach zero, implying that the operating income is expected to be exactly equal to interest expenses—neither sufficient nor insufficient to cover them, which could denote a breakeven scenario in terms of interest coverage.
Overall, the trend in Coherent Inc.’s interest coverage ratios over the analyzed periods reflects a historically precarious position concerning the company's ability to service its interest obligations exclusively with operating earnings, with slight recent improvements suggesting some recovery but still indicating a potential risk of interest coverage shortfalls in the near to medium term.
Peer comparison
Jun 30, 2025