IPG Photonics Corporation (IPGP)

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 14,580 29,917 112,891 172,613 231,566 185,240 180,669 195,652 210,033 304,726 352,656 358,419 360,181 352,952 329,312 295,374 231,510 210,908 211,149 246,173
Interest expense (ttm) US$ in thousands 0 34,202 34,202 43,466 50,999 24,685 28,310 20,223 12,760 5,521 2,184 1,414 1,839 1,363 2,243 3,692 6,270 20,335 22,901 25,096
Interest coverage — 0.87 3.30 3.97 4.54 7.50 6.38 9.67 16.46 55.19 161.47 253.48 195.86 258.95 146.82 80.00 36.92 10.37 9.22 9.81

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $14,580K ÷ $0K
= —

Analyzing the interest coverage ratio of IPG Photonics Corporation reveals the company's ability to meet its interest obligations with its earnings. The interest coverage ratio is calculated by dividing operating income by interest expense, reflecting the company's capability to pay interest on its debt.

Looking at the trend in IPG Photonics' interest coverage ratio over the past few periods, it is evident that the company had a solid interest coverage ratio in the earlier periods, hovering around 9 to 10 times. However, there was a significant improvement in the ratio in the latter part of 2020 and throughout 2021, with the interest coverage ratio reaching exceptionally high levels, peaking at 258.95 in September 2021.

Subsequently, there was a slight decline in the ratio in the following periods up to June 2022, where it remained above 100, indicating a healthy financial position. However, from September 2022 onwards, the interest coverage ratio witnessed a substantial decrease, falling to as low as 0.87 by September 2024. This significant decline may raise concerns regarding the company's ability to comfortably cover its interest expenses with its operating income.

Moreover, the absence of data for December 2024 makes it challenging to assess the most recent performance of the company in terms of interest coverage. However, based on the decreasing trend observed in the ratio, investors and stakeholders may need to closely monitor IPG Photonics' financial health and debt management practices to ensure stability and sustainability in the long term.