Enphase Energy Inc (ENPH)

Interest coverage

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	77,292	521,978	461,486	166,080	140,411
Interest expense	US$ in thousands	8,905	8,839	9,438	45,152	21,001
Interest coverage		8.68	59.05	48.90	3.68	6.69

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $77,292K ÷ $8,905K
= 8.68

The interest coverage ratio for Enphase Energy Inc has shown fluctuations over the years, indicating varying levels of ability to cover its interest expenses. As of December 31, 2020, the interest coverage ratio was 6.69, indicating the company's ability to cover its interest payments by its operating income approximately 6.69 times.

However, there was a notable decrease in the interest coverage ratio to 3.68 as of December 31, 2021, suggesting a potential decline in the company's ability to cover its interest expenses adequately.

The subsequent years saw a significant improvement in the interest coverage ratio, with ratios of 48.90, 59.05, and 8.68 as of December 31, 2022, 2023, and 2024 respectively.

The notable increase in the interest coverage ratio in 2022 and 2023 indicates a strong improvement in the company's ability to cover its interest payments comfortably, while the decrease in 2024 suggests a slight dip in this aspect compared to the previous year.

Overall, the trend of the interest coverage ratio for Enphase Energy Inc reflects fluctuations in its ability to cover interest expenses efficiently, with some years exhibiting strong coverage and others showing a slight decline or improvement.