FormFactor Inc (FORM)

Interest coverage

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 Mar 31, 2020
Earnings before interest and tax (EBIT) (ttm) US$ in thousands 101,997 140,616 123,826 102,918 78,030 -19,409 -14,697 24,026 46,298 93,992 111,647 98,415 99,025 88,298 87,451 89,988 86,039 90,582 78,282 65,240
Interest expense (ttm) US$ in thousands 418 1,697 1,697 3,179 4,455 2,874 3,026 1,663 579 618 617 614 602 629 671 726 864 1,058 1,287 1,638
Interest coverage 244.01 82.86 72.97 32.37 17.52 -6.75 -4.86 14.45 79.96 152.09 180.95 160.29 164.49 140.38 130.33 123.95 99.58 85.62 60.83 39.83

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $101,997K ÷ $418K
= 244.01

The interest coverage ratio of FormFactor Inc has shown a fluctuating trend over the analyzed period. From March 31, 2020, to June 30, 2022, the interest coverage ratio consistently improved, indicating the company's ability to cover its interest expenses with operating income. However, from September 30, 2022, to December 31, 2024, there were notable declines in the interest coverage ratio, reaching negative values in the third and fourth quarters of 2023.

The substantial drop in the interest coverage ratio in the latter part of the analysis period suggests potential concerns regarding the company's ability to meet its interest obligations with its operating earnings during that time. It would be important to investigate the factors contributing to the decline in the interest coverage ratio during this period to assess the company's financial health and risk profile accurately.