Garmin Ltd (GRMN)

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	1,593,993	1,418,366	1,251,260	1,193,588	1,092,160	1,018,880	987,884	996,269	1,027,843	1,075,789	1,119,086	1,197,518	1,218,621	1,274,768	1,309,199	1,126,416	1,054,239	959,495	903,854	971,686
Interest expense (ttm)	US$ in thousands	0	0	0	0	32,478	46,784	57,256	65,751	40,826	33,525	29,950	28,473	28,572	28,311	29,191	32,628	37,002	43,327	47,859	51,139
Interest coverage		—	—	—	—	33.63	21.78	17.25	15.15	25.18	32.09	37.37	42.06	42.65	45.03	44.85	34.52	28.49	22.15	18.89	19.00

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,593,993K ÷ $0K
= —

The interest coverage ratio measures a company's ability to pay its interest expenses on outstanding debt. A higher ratio indicates that the company is more capable of meeting its interest obligations.

Analyzing Garmin Ltd's interest coverage ratio over the past few years, we observe the following trend:

- The interest coverage ratio has been consistently strong, starting at 19.00 in March 2020 and peaking at 45.03 in September 2021.
- The company's ability to cover its interest expenses gradually improved from 2020 to 2021, reflecting a healthy financial position during this period.
- However, the interest coverage ratio started to decline from June 2021 onwards, dropping to 32.09 in September 2022 and further decreasing to 15.15 in March 2023.
- The declining trend in the interest coverage ratio may indicate a potential strain on the company's ability to cover its interest payments, raising concerns about its financial risk.
- The ratio improved slightly in subsequent periods but remained below the levels seen in 2021.

Overall, while Garmin Ltd has historically exhibited strong interest coverage, the recent decline in the ratio signals a need for closer monitoring of the company's debt servicing capabilities to ensure financial stability in the future.