Kulicke and Soffa Industries Inc (KLIC)

Interest coverage

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	-92,496	72,343	477,196	414,674	66,014
Interest expense	US$ in thousands	89	142	208	218	1,716
Interest coverage		-1,039.28	509.46	2,294.21	1,902.17	38.47

September 30, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $-92,496K ÷ $89K
= -1,039.28

The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio is usually preferable as it indicates that the company is more capable of meeting its interest obligations.

In the case of Kulicke and Soffa Industries Inc, the trend in the interest coverage ratio over the past five years is quite volatile. The interest coverage ratio was significantly negative at -1,039.28 in 2024, indicating that the company's operating income was not sufficient to cover its interest expenses during that period. This is a concerning sign as it suggests that the company may be at a higher risk of defaulting on its debt obligations.

The interest coverage ratio improved significantly in 2023 to 509.46, which is a positive sign showing that the company's operating income was more than sufficient to cover its interest expenses that year.

In 2022, the interest coverage ratio was very high at 2,294.21, indicating that the company had a strong ability to meet its interest obligations with its operating income. Similarly, in 2021, the interest coverage ratio was also healthy at 1,902.17, demonstrating the company's solid financial position.

However, in 2020, the interest coverage ratio was relatively low at 38.47, indicating that the company's operating income was just sufficient to cover its interest expenses for that year.

Overall, the fluctuating trend in Kulicke and Soffa Industries Inc's interest coverage ratio over the past five years suggests varying levels of financial health and ability to meet interest obligations. It is essential for investors and stakeholders to closely monitor this ratio to assess the company's financial stability and debt repayment capacity.