Garmin Ltd (GRMN)

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	1,593,990	1,092,160	1,027,840	1,218,620	1,054,240
Interest expense	US$ in thousands	—	—	40,826	57,087	51,995
Interest coverage		—	—	25.18	21.35	20.28

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $1,593,990K ÷ $—K
= —

The interest coverage ratio, which measures a company's ability to cover its interest expenses with its operating income, has shown a positive trend for Garmin Ltd over the past few years.

As of December 31, 2020, the interest coverage ratio was 20.28, indicating that Garmin's operating income was more than sufficient to cover its interest expense by over 20 times. This demonstrates a strong financial position and good ability to meet interest obligations.

By December 31, 2021, the interest coverage ratio improved further to 21.35, suggesting even greater comfort in meeting interest payments. This continued improvement in the ratio reflects well on the company's financial health.

As of the most recent data available for December 31, 2022, the interest coverage ratio rose to 25.18, indicating an even stronger ability to cover interest expenses. This indicates that Garmin's operating income has significantly outpaced its interest expenses.

However, it is worth noting that data for the subsequent years, December 31, 2023 and 2024, are not provided (marked as "—"). It would be advisable for stakeholders to monitor future interest coverage ratios to ensure Garmin's ability to service its interest payments remains robust.

Overall, the consistent increase in the interest coverage ratio for Garmin Ltd up to December 31, 2022, reflects a positive trend in the company's financial performance and its ability to handle interest expenses effectively.