Dolby Laboratories (DLB)
Interest coverage
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 258,326 | 215,753 | 215,862 | 347,395 | 239,645 |
| Interest expense | US$ in thousands | 34,077 | 161 | 394 | 479 | 186 |
| Interest coverage | 7.58 | 1,340.08 | 547.87 | 725.25 | 1,288.41 |
September 30, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $258,326K ÷ $34,077K
= 7.58
The interest coverage ratio measures a company's ability to meet its interest payment obligations on outstanding debt. Dolby Laboratories' interest coverage has been fluctuating over the past five years. In 2024, the interest coverage ratio was 7.58, indicating that Dolby Laboratories generated 7.58 times the amount of operating income needed to cover its interest expenses for the year. This suggests a strong ability to meet interest payments.
However, the interest coverage ratio in 2023 was unusually high at 1,340.08, which could be due to specific one-time events or anomalies in the financial data. In contrast, the ratios for 2022, 2021, and 2020 were 547.87, 725.25, and 1,288.41, respectively, indicating similarly strong coverage in those years.
Overall, while the extremely high ratio in 2023 may skew the average, Dolby Laboratories generally demonstrates a strong ability to cover its interest expenses with operating income, providing a favorable indication of the company's financial health and stability.
Peer comparison
Sep 30, 2024