Lattice Semiconductor Corporation (LSCC)

Interest coverage

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Earnings before interest and tax (EBIT) US$ in thousands 60,677 214,178 186,258 100,364 52,158
Interest expense US$ in thousands 3,948 2,041 4,146 2,738 3,702
Interest coverage 15.37 104.94 44.92 36.66 14.09

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $60,677K ÷ $3,948K
= 15.37

The interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt. A higher interest coverage ratio indicates that the company is more capable of servicing its debt, while a lower ratio may signal potential financial distress.

Looking at the data provided for Lattice Semiconductor Corporation, we can observe a fluctuating trend in the interest coverage ratio over the years.

- As of December 31, 2020, the interest coverage ratio was 14.09, indicating that the company earned 14.09 times the amount needed to cover its interest expenses. This suggests a moderate ability to meet interest payments.

- The ratio significantly improved by year-end December 31, 2021, reaching 36.66. This higher ratio reflects a stronger ability to meet interest obligations and potentially indicates improved financial health.

- Continuing the positive trend, the interest coverage ratio rose to 44.92 by December 31, 2022, further enhancing the company's capacity to handle interest payments comfortably.

- By the end of December 31, 2023, the interest coverage ratio surged to 104.94, signaling a substantial increase in the ability to cover interest expenses, highlighting a robust financial position.

- However, by December 31, 2024, the interest coverage ratio dropped to 15.37, indicating a decrease in the company's ability to service its interest obligations compared to the previous year.

In conclusion, while Lattice Semiconductor Corporation has shown fluctuations in its interest coverage ratio over the years, the company has generally demonstrated an improving ability to cover its interest expenses until a slight decline in 2024. It is essential for stakeholders to monitor these ratios continuously to assess the company's financial health and debt servicing capabilities effectively.