MKS Instruments Inc (MKSI)

Interest coverage

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	-1,572,000	-1,432,000	-1,427,000	439,000	610,000	644,000	696,000	711,000	688,000	650,900	594,300	515,900	452,100	369,200	322,700	287,600	221,900	252,923	302,258	390,224
Interest expense (ttm)	US$ in thousands	356,000	350,000	337,000	256,000	177,000	99,000	25,000	24,000	24,000	24,300	24,900	26,100	29,000	31,500	38,400	43,900	44,100	39,129	29,348	20,570
Interest coverage		-4.42	-4.09	-4.23	1.71	3.45	6.51	27.84	29.62	28.67	26.79	23.87	19.77	15.59	11.72	8.40	6.55	5.03	6.46	10.30	18.97

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-1,572,000K ÷ $356,000K
= -4.42

The interest coverage ratio represents the ability of a company to meet its interest obligations with its operating income. A higher interest coverage ratio indicates a company's stronger ability to cover its interest expenses.

For MKS Instruments Inc, the interest coverage ratio fluctuated over the periods provided. From March 2019 to March 2020, the ratio declined, indicating a potential decrease in the company's ability to cover its interest expenses. This period was followed by an increase in the interest coverage ratio, reaching its peak in June 2022 and March 2022, at 27.84 and 29.62, respectively.

However, from June 2022 to March 2023, the interest coverage ratios declined significantly, with negative values observed in the most recent periods - indicating that the company's operating income was not sufficient to cover its interest payments during those periods.

The significant decrease in the interest coverage ratio in the most recent periods raises concerns about the company's ability to meet its interest obligations going forward. It suggests that the company may be facing financial difficulties or experiencing challenges that are impacting its profitability and ability to cover its interest expenses.

Further analysis of the company's financial performance, debt structure, and operating efficiency is needed to understand the reasons behind the fluctuation in the interest coverage ratio and assess the company's overall financial health and sustainability.