Ichor Holdings Ltd (ICHR)

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	-11,699	14,055	51,665	80,015	86,386	84,123	72,667	72,516	80,207	78,461	69,450	53,559	41,018	32,762	23,837	17,540	14,922	15,445	23,712	46,803
Interest expense (ttm)	US$ in thousands	19,379	18,928	17,041	14,074	11,056	8,298	6,536	6,064	6,451	6,996	7,561	8,272	8,727	9,182	9,793	10,253	10,647	10,820	10,710	10,251
Interest coverage		-0.60	0.74	3.03	5.69	7.81	10.14	11.12	11.96	12.43	11.22	9.19	6.47	4.70	3.57	2.43	1.71	1.40	1.43	2.21	4.57

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-11,699K ÷ $19,379K
= -0.60

Ichor Holdings Ltd's interest coverage ratio has experienced fluctuations over the past few quarters. The interest coverage ratio measures the company's ability to pay its interest expenses on outstanding debt. A ratio below 1 indicates that the company is not generating enough operating income to cover its interest payments.

Looking at the trend, we observe that Ichor Holdings Ltd had a negative interest coverage ratio of -0.60 on Dec 31, 2023, which suggests that its operating income was insufficient to cover its interest expenses during that period. However, the ratio improved to 0.74 on Sep 30, 2023, indicating a slight increase in its ability to cover interest payments.

The trend continues to show improvement, with the interest coverage ratio steadily increasing in the subsequent quarters. This improvement culminated in a peak interest coverage ratio of 12.43 on Dec 31, 2021, indicating a strong ability to meet interest obligations.

Overall, it is important to monitor the interest coverage ratio of Ichor Holdings Ltd over time to assess its financial health and ability to service its debt obligations. fluctuations in this ratio may provide insights into the company's profitability and financial stability.