Diodes Incorporated (DIOD)

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	51,974	67,569	104,751	182,337	264,986	334,283	390,289	407,065	409,398	421,671	386,472	345,591	299,923	230,295	190,903	156,415	134,977	156,105	166,965	185,212
Interest expense (ttm)	US$ in thousands	2,334	2,321	2,763	4,100	5,700	8,111	9,937	9,338	8,320	6,621	5,314	5,741	7,491	10,317	12,645	13,281	11,662	9,373	7,635	6,993
Interest coverage		22.27	29.11	37.91	44.47	46.49	41.21	39.28	43.59	49.21	63.69	72.73	60.20	40.04	22.32	15.10	11.78	11.57	16.65	21.87	26.49

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $51,974K ÷ $2,334K
= 22.27

Diodes Incorporated's interest coverage ratio has shown fluctuation over the past few years. The trend indicates a decreasing pattern from a high of 72.73 in June 30, 2022, to a low of 22.27 in December 31, 2024. The interest coverage ratio measures the company's ability to meet its interest obligations with its operating income.

It is worth noting that the interest coverage ratio was relatively strong in the previous years, with a sharp increase from March 31, 2022, to June 30, 2022. However, the ratio started to decline consistently after peaking in June 30, 2022.

The company experienced a significant decrease in interest coverage from June 30, 2024, to December 31, 2024, which may indicate a potential strain on the company's ability to cover its interest payments using its operating income. This decline warrants further investigation into the company's financial health and ability to generate sufficient earnings to meet its interest obligations.

Overall, the fluctuating trend in Diodes Incorporated's interest coverage ratio suggests the need for careful monitoring of the company's financial performance and debt management strategies to ensure sustainable operations and mitigate financial risks.