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.