Diodes Incorporated (DIOD)

Interest coverage

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	280,167	347,972	396,962	395,735	396,288	409,132	384,457	353,762	315,061	245,637	197,798	156,643	130,862	152,059	165,971	187,084	205,274	188,939	184,675	173,571
Interest expense (ttm)	US$ in thousands	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	7,893	8,445	8,756	9,289
Interest coverage		49.15	42.90	39.95	42.38	47.63	61.79	72.35	61.62	42.06	23.81	15.64	11.79	11.22	16.22	21.74	26.75	26.01	22.37	21.09	18.69

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $280,167K ÷ $5,700K
= 49.15

To analyze Diodes, Inc.'s interest coverage, we will focus on the trend over the past eight quarters. The interest coverage ratio is calculated by dividing earnings before interest and taxes (EBIT) by the interest expense.

In Q4 2023 and Q3 2023, the interest coverage ratios were not provided, so we will exclude these quarters from our analysis.

From Q2 2023 to Q1 2022, we observe a declining trend in the interest coverage ratio. In Q2 2023, the interest coverage ratio was 96.37, declining from 84.30 in Q1 2023. This downward trend continued from Q1 2023 to Q4 2022, with the interest coverage ratio decreasing from 87.04 to 126.53, representing a consistent deterioration in the company's ability to cover its interest expenses with its earnings.

Although the interest coverage ratio in Q2 and Q3 2022 was notably higher at 174.92 and 121.19, respectively, compared to the surrounding quarters, the overall trend indicates a concerning pattern of declining interest coverage for Diodes, Inc. This declining trend could raise concerns regarding the company's ability to meet its interest obligations using its operating earnings, implying potential financial strain in servicing its debt in the future.

Therefore, based on the historical data available, Diodes, Inc.'s interest coverage ratio has exhibited a fluctuating pattern, with a general downward trend over the past eight quarters, indicating a potential increase in the company's financial risk related to debt repayment obligations.