Flex Ltd (FLEX)
Interest coverage
| Mar 31, 2025 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 883,000 | 1,052,000 | 1,063,000 | 1,002,000 | 1,053,000 | 1,143,000 | 1,120,000 | 1,073,000 | 1,062,000 | 1,042,000 | 967,000 | 1,002,000 | 982,000 | 1,039,000 | 1,045,000 | 986,215 | 863,187 | 568,396 | 521,820 | 425,585 |
| Interest expense (ttm) | US$ in thousands | 218,000 | 208,000 | 204,000 | 200,000 | 200,000 | 209,000 | 218,000 | 221,000 | 208,000 | 197,000 | 173,000 | 158,000 | 137,000 | 189,000 | 158,000 | 143,000 | 154,374 | 94,332 | 137,332 | 163,081 |
| Interest coverage | 4.05 | 5.06 | 5.21 | 5.01 | 5.26 | 5.47 | 5.14 | 4.86 | 5.11 | 5.29 | 5.59 | 6.34 | 7.17 | 5.50 | 6.61 | 6.90 | 5.59 | 6.03 | 3.80 | 2.61 |
March 31, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $883,000K ÷ $218,000K
= 4.05
Flex Ltd's interest coverage ratio has shown fluctuations over the past few years, ranging from a low of 2.61 on June 30, 2020, to a high of 7.17 on March 31, 2022. The interest coverage ratio measures a company's ability to meet its interest obligations with its earnings before interest and taxes (EBIT). A higher ratio indicates a greater ability to cover interest expenses from operating income.
The trend in Flex Ltd's interest coverage ratio has generally been positive, with an increasing trend from 2020 to 2022. This indicates that the company's earnings were sufficient to cover its interest expenses during this period. However, starting from June 30, 2022, the interest coverage ratio started to decline gradually, reaching 4.05 on March 31, 2025. This downward trend may signal some strain on Flex Ltd's ability to cover its interest payments from its operating earnings in the more recent periods.
It is important for investors and stakeholders to closely monitor Flex Ltd's interest coverage ratio, as a declining ratio could indicate increased financial risk and potentially a higher vulnerability to default. By analyzing this ratio over time, stakeholders can gain insights into the company's financial health and its ability to manage debt obligations.
Peer comparison
Mar 31, 2025