Harmonic Inc (HLIT)
Interest coverage
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 21,837 | 28,930 | 48,496 | 58,026 | 49,737 | 48,434 | 42,286 | 24,919 | 19,496 | 20,485 | 13,539 | 789 | -14,708 | -24,165 | 172 | 3,169 | 13,083 | 13,702 | -12,498 | -4,092 |
| Interest expense (ttm) | US$ in thousands | 2,696 | 3,054 | 3,719 | 4,313 | 5,040 | 6,817 | 8,219 | 9,455 | 10,625 | 10,656 | 10,777 | 11,209 | 11,509 | 11,663 | 11,789 | 11,666 | 11,651 | 11,831 | 11,709 | 11,553 |
| Interest coverage | 8.10 | 9.47 | 13.04 | 13.45 | 9.87 | 7.10 | 5.14 | 2.64 | 1.83 | 1.92 | 1.26 | 0.07 | -1.28 | -2.07 | 0.01 | 0.27 | 1.12 | 1.16 | -1.07 | -0.35 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $21,837K ÷ $2,696K
= 8.10
Interest coverage is a vital financial ratio that reflects a company's ability to meet its interest payments with its operating income. In the case of Harmonic, Inc., the interest coverage ratio has shown a favorable trend over the past eight quarters.
In Q4 2023, the interest coverage ratio was 8.52, indicating that the company generated operating income 8.52 times greater than its interest expense for that quarter. This was a slight decrease from the previous quarter Q3 2023, where the ratio was higher at 10.16. Despite the slight dip, an interest coverage ratio of over 8 still signifies a healthy ability to pay interest obligations.
Looking back over the past two years, Harmonic, Inc. has shown significant improvement in its interest coverage ratio. Compared to Q1 2022, when the ratio was 2.79, the current ratio of around 8 to 13 demonstrates a much stronger ability to cover interest expenses with operating income. This indicates growing profitability and stability in the company's financial position.
Overall, Harmonic, Inc. has been steadily improving its ability to cover interest payments over the past eight quarters, reflecting a positive trend in the company's financial health and operational efficiency.
Peer comparison
Dec 31, 2023