Novanta Inc (NOVT)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 110,584 | 110,496 | 103,079 | 64,054 | 55,888 |
| Interest expense | US$ in thousands | 1,200 | 1,474 | 1,508 | 1,540 | 1,432 |
| Interest coverage | 92.15 | 74.96 | 68.35 | 41.59 | 39.03 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $110,584K ÷ $1,200K
= 92.15
Novanta Inc's interest coverage has been consistently strong over the past five years, showing an upward trend. The interest coverage ratio measures the company's ability to cover its interest expenses with its operating income.
In December 2020, the interest coverage ratio was 39.03, indicating the company generated 39 times more operating income than the interest expenses incurred. By December 2024, this ratio had increased significantly to 92.15, highlighting the company's improved ability to cover its interest expenses.
The rising trend in Novanta Inc's interest coverage ratio suggests that the company's profitability and earnings are sufficient to comfortably meet its interest obligations. This bodes well for the company's financial health and indicates a reduced risk of financial distress due to debt servicing issues.
Peer comparison
Dec 31, 2024