MKS Instruments Inc (MKSI)
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 | -1,572,000 | 610,000 | 690,000 | 452,000 | 221,900 |
| Interest expense | US$ in thousands | 356,000 | 177,000 | 25,000 | 29,000 | 44,100 |
| Interest coverage | -4.42 | 3.45 | 27.60 | 15.59 | 5.03 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $-1,572,000K ÷ $356,000K
= -4.42
The interest coverage ratio for MKS Instruments Inc has fluctuated over the past five years. In 2023, the interest coverage ratio was negative at -4.42, indicating that the company's operating income was insufficient to cover its interest expenses. This represents a significant decline from the previous year's ratio of 3.45, which was a positive indicator of the company's ability to meet its interest obligations comfortably.
Looking further back, the interest coverage ratio was exceptionally high in 2021 at 27.60, reflecting a strong ability to cover interest payments with operating income. This ratio declined in 2022 to 15.59 but remained at a healthy level. In 2019, the interest coverage ratio was 5.03, indicating the company's ability to cover its interest expenses adequately.
Overall, the fluctuation in the interest coverage ratio suggests some variability in MKS Instruments Inc's ability to meet its interest obligations over the years. The negative interest coverage ratio in 2023 raises concerns about the company's financial health and its ability to service its debt obligations. Further analysis of the company's financial condition is recommended to understand the underlying reasons for the fluctuation in the interest coverage ratio.
Peer comparison
Dec 31, 2023