Materion Corporation (MTRN)
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 | 136,444 | 119,755 | 77,111 | 8,215 | 70,546 |
| Interest expense | US$ in thousands | 35,126 | 23,833 | 6,286 | 4,910 | 2,669 |
| Interest coverage | 3.88 | 5.02 | 12.27 | 1.67 | 26.43 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $136,444K ÷ $35,126K
= 3.88
Materion Corp's interest coverage ratio indicates the company's ability to meet its interest payments on outstanding debt. The trend in Materion Corp's interest coverage ratio over the past five years shows a fluctuating pattern.
At the end of 2023, Materion Corp's interest coverage ratio was 4.47, which implies that the company generated operating profits 4.47 times its interest expense. This represents a decrease from the previous years, indicating a potential strain on the company's ability to cover its interest payments effectively.
In 2022, the interest coverage ratio was 5.52, showing an improvement from the prior year. This suggests that the company had a greater capacity to meet its interest obligations from its operating income.
The year 2021 exhibited a significantly higher interest coverage ratio of 15.94, indicating a strong ability to cover interest expenses. This could signify a favorable financial position for the company during that period.
In 2020, the interest coverage ratio was 7.07, which implies a lower ability to cover interest payments compared to the previous year. However, the ratio still indicates a reasonable level of coverage.
The highest interest coverage ratio over the five-year period was in 2019, at 52.66, signifying a robust ability to cover interest expenses from operating profits.
Overall, Materion Corp's interest coverage ratio has shown fluctuations over the years, indicating varying levels of risk associated with the company's debt service obligations. Investors and stakeholders should continue to monitor this ratio to assess the company's financial health and ability to meet its debt obligations.