CTS Corporation (CTS)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 75,459 | 75,051 | 83,467 | -59,513 | 45,307 |
| Interest expense | US$ in thousands | 4,236 | 3,331 | 2,192 | 2,111 | 3,272 |
| Interest coverage | 17.81 | 22.53 | 38.08 | -28.19 | 13.85 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $75,459K ÷ $4,236K
= 17.81
The interest coverage ratio of CTS Corporation has fluctuated over the past five years. In December 2020, the company had an interest coverage ratio of 13.85, indicating that it was able to cover its interest expenses nearly 14 times over with its operating income. However, this ratio sharply decreased to -28.19 by December 2021, implying that the company's operating income was insufficient to cover its interest expenses during that period.
Subsequently, CTS Corporation's interest coverage ratio improved significantly in December 2022 to 38.08, signifying a strong ability to pay interest obligations from operating income. The ratio remained favorable in December 2023 at 22.53 and then decreased slightly to 17.81 by December 2024, still indicating a healthy coverage of interest expenses.
Overall, while there have been fluctuations in CTS Corporation's interest coverage ratio, the company has generally demonstrated a strong ability to meet its interest payments with its operating income in recent years, except for the anomaly in December 2021. Maintaining a healthy interest coverage ratio is crucial for the company's financial stability and indicates its ability to service its debt obligations effectively.
Peer comparison
Dec 31, 2024