CTS Corporation (CTS)
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 | ||
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Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 78,094 | 78,490 | 75,621 | 76,814 | 84,040 | 86,743 | 90,620 | 93,610 | 97,080 | 90,431 | -24,277 | -47,808 | -58,059 | -55,260 | 47,870 | 53,861 | 45,307 | 41,741 | 40,334 | 52,285 |
Interest expense (ttm) | US$ in thousands | 4,235 | 3,763 | 3,453 | 3,438 | 3,331 | 3,211 | 2,556 | 2,340 | 2,192 | 2,024 | 2,196 | 2,102 | 2,111 | 2,232 | 2,575 | 2,976 | 3,272 | 3,520 | 3,475 | 3,033 |
Interest coverage | 18.44 | 20.86 | 21.90 | 22.34 | 25.23 | 27.01 | 35.45 | 40.00 | 44.29 | 44.68 | -11.06 | -22.74 | -27.50 | -24.76 | 18.59 | 18.10 | 13.85 | 11.86 | 11.61 | 17.24 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $78,094K ÷ $4,235K
= 18.44
Interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations.
Analyzing the trend of CTS Corporation's interest coverage from March 2020 to December 2024, we observe fluctuations in the ratio. The interest coverage ratio started at a healthy level of 17.24 in March 2020, indicating a strong ability to cover interest expenses. However, it decreased gradually over the next few quarters, reaching a low point of -27.50 in December 2021 and further worsening to -22.74 by March 2022.
From September 2022 onwards, there was a significant improvement in the interest coverage ratio, turning positive and showing a strong positive trend. The ratio surged to 44.29 by December 2022, indicating a substantial increase in the company's ability to cover interest payments. This positive momentum continued through the following quarters, with the interest coverage ratio remaining above 20, reflecting a healthy financial position.
Overall, CTS Corporation's interest coverage ratio displayed volatility in the past, experiencing both lows and highs. However, the recent trend shows a positive turnaround, with the company significantly improving its ability to cover interest expenses, which bodes well for its financial stability. It is essential for investors and stakeholders to monitor these fluctuations in the interest coverage ratio to assess the company's financial health and risk profile.
Peer comparison
Dec 31, 2024