Littelfuse Inc (LFUS)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 368,464 | 469,260 | 359,552 | 182,330 | 192,791 |
| Interest expense | US$ in thousands | 39,866 | 26,216 | 18,527 | 21,077 | 22,266 |
| Interest coverage | 9.24 | 17.90 | 19.41 | 8.65 | 8.66 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $368,464K ÷ $39,866K
= 9.24
Based on the data provided, Littelfuse Inc's interest coverage ratio has fluctuated over the past five years. The interest coverage ratio measures the company's ability to meet its interest payment obligations on outstanding debt, with a higher ratio indicating a stronger ability to do so.
In 2023, the interest coverage ratio was 9.24, which represents a decrease from the previous two years where the ratios were significantly higher at 17.90 in 2022 and 19.41 in 2021. This decline indicates that the company's ability to cover its interest expenses decreased in 2023 compared to the preceding years.
Although the interest coverage ratio in 2023 was lower than in 2022 and 2021, it was still higher than the ratios in 2020 (8.65) and 2019 (8.66). This suggests that, despite the decrease, Littelfuse Inc's ability to service its interest payments in 2023 was better than two years prior.
Overall, Littelfuse Inc has demonstrated historically strong interest coverage ratios, which indicates the company's overall ability to meet its interest payment obligations has been solid. However, the slight decrease in the ratio in 2023 compared to the previous years may warrant further investigation to understand the factors behind this change.
Peer comparison
Dec 31, 2023