MACOM Technology Solutions Holdings Inc (MTSI)

Interest coverage

		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	Dec 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	73,667	61,740	59,330	79,827	107,400	132,955	151,665	148,277	251,671	236,213	221,210	210,545	65,008	61,834	23,438	613	-14,182	-57,236	-356,922	-392,250
Interest expense (ttm)	US$ in thousands	5,137	7,706	8,762	9,111	8,423	9,203	7,704	7,459	8,550	10,879	15,560	19,022	22,063	20,349	20,672	23,493	27,380	30,803	33,921	35,651
Interest coverage		14.34	8.01	6.77	8.76	12.75	14.45	19.69	19.88	29.44	21.71	14.22	11.07	2.95	3.04	1.13	0.03	-0.52	-1.86	-10.52	-11.00

September 30, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $73,667K ÷ $5,137K
= 14.34

Interest coverage measures a company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio indicates a stronger ability to meet interest obligations. Looking at MACOM Technology Solutions Holdings Inc's interest coverage ratio over the past few quarters, we observe fluctuations in the company's ability to cover its interest expenses.

From December 2019 to September 2020, interest coverage ratios were negative, indicating that the company's operating income was insufficient to cover its interest expenses during these periods. However, from March 2020 onwards, the interest coverage ratio improved significantly, reaching positive values.

The interest coverage ratio peaked in March 2023 at 19.69 and then slightly declined in subsequent quarters. The ratios remained relatively high until December 2023 before declining to 6.77 in March 2024, indicating a reduction in the company's ability to cover interest expenses.

The latest interest coverage ratio for September 2024 stands at 14.34, which is relatively high compared to the ratios observed in the previous quarters. This implies that the company's operating income is more than sufficient to cover its interest expenses as of September 2024.

Overall, while the interest coverage ratio for MACOM Technology Solutions Holdings Inc has shown fluctuations over the past few quarters, the recent data suggests an improvement in the company's ability to cover its interest expenses, which is a positive indicator for its financial health.