Harmonic Inc (HLIT)

Interest coverage is a key financial ratio that reflects a company's ability to meet its interest payment obligations on outstanding debt. A higher interest coverage ratio indicates a stronger ability to fulfill these obligations.

Analyzing Harmonic, Inc.'s interest coverage over the past five years reveals fluctuations in its ability to cover interest expenses. In 2023 and 2022, the interest coverage ratios of 8.52 and 9.69, respectively, demonstrate a favorable ability to pay interest expenses with operating income. These ratios suggest the company had ample earnings to cover its interest payments during these years.

However, in 2021 and 2019, with interest coverage ratios of 1.78 and 1.39, respectively, Harmonic, Inc. had a relatively lower ability to cover its interest expenses. While these ratios indicate that the company's operating income was still able to cover interest payments, the margins were tighter compared to the more recent years.

The most concerning observation is the negative interest coverage ratio of -0.88 in 2020. This indicates that Harmony, Inc.'s operating income was not sufficient to cover its interest expenses during that year, which can be a warning sign of financial distress.

Overall, Harmonic, Inc.'s interest coverage ratio has shown variability over the past five years, with recent years demonstrating improved ability to cover interest payments. It is essential for investors and stakeholders to monitor this ratio to assess the company's financial health and ability to manage its debt obligations effectively.

Peer comparison

Dec 31, 2023