Materion Corporation (MTRN)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 47,223 | 113,210 | 119,156 | 123,164 | 138,585 | 150,136 | 143,203 | 140,161 | 123,266 | 99,585 | 91,752 | 80,724 | 80,943 | 72,261 | 50,282 | 36,704 | 11,086 | 20,307 | 27,383 | 41,002 |
| Interest expense (ttm) | US$ in thousands | 37,751 | 13,592 | 20,841 | 28,054 | 35,127 | 32,329 | 30,539 | 27,599 | 23,832 | 18,130 | 13,103 | 9,260 | 6,286 | 4,551 | 5,024 | 5,425 | 4,910 | 4,106 | 3,208 | 2,449 |
| Interest coverage | 1.25 | 8.33 | 5.72 | 4.39 | 3.95 | 4.64 | 4.69 | 5.08 | 5.17 | 5.49 | 7.00 | 8.72 | 12.88 | 15.88 | 10.01 | 6.77 | 2.26 | 4.95 | 8.54 | 16.74 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $47,223K ÷ $37,751K
= 1.25
The interest coverage ratio of Materion Corporation, which measures the company's ability to meet its interest payment obligations, has shown fluctuations over the years based on the provided data.
As of December 31, 2024, the interest coverage ratio is at 1.25, indicating a potential concern as the ratio is below 1, which may signal that the company is not generating enough operating income to cover its interest expenses. This could suggest a heightened risk of default on its debt obligations.
It is notable that the interest coverage ratio was highest on March 31, 2020, at 16.74, reflecting a strong ability to cover interest payments at that point in time. However, the ratio has steadily declined since then, with occasional fluctuations, reaching its lowest point by December 31, 2024.
The declining trend in the interest coverage ratio may be a cause for caution, as it suggests a potential strain on Materion Corporation's financial health in terms of its ability to service its debt. It would be advisable for stakeholders to closely monitor the company's financial performance and management of its debt obligations to mitigate risks associated with its current interest coverage levels.