Novanta Inc (NOVT)
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 | 110,496 | 115,663 | 114,015 | 105,108 | 103,079 | 97,923 | 84,537 | 77,238 | 64,054 | 59,437 | 56,028 | 53,737 | 55,888 | 51,800 | 52,735 | 54,139 | 55,282 | 57,975 | 66,169 | 68,179 |
| Interest expense (ttm) | US$ in thousands | 1,474 | 1,482 | 1,491 | 1,500 | 1,508 | 1,517 | 1,525 | 1,533 | 1,541 | 1,364 | 1,387 | 1,409 | 1,432 | 1,540 | 1,542 | 1,535 | 1,530 | 10,130 | 12,416 | 14,876 |
| Interest coverage | 74.96 | 78.05 | 76.47 | 70.07 | 68.35 | 64.55 | 55.43 | 50.38 | 41.57 | 43.58 | 40.40 | 38.14 | 39.03 | 33.64 | 34.20 | 35.27 | 36.13 | 5.72 | 5.33 | 4.58 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $110,496K ÷ $1,474K
= 74.96
Novanta Inc's interest coverage ratio has shown a gradual decline from Q1 2022 to Q4 2023. The trend indicates a decreasing ability of the company to cover its interest expenses with its earnings before interest and taxes (EBIT).
In Q1 2022, the interest coverage ratio was strong at 9.89, indicating that the company's EBIT was almost 10 times higher than its interest expenses. However, this ratio steadily decreased over the subsequent quarters, reaching its lowest point of 4.78 in Q4 2023.
A declining interest coverage ratio may raise concerns about Novanta Inc's ability to meet its interest obligations from its operational earnings. It suggests that the company may face challenges in servicing its debt obligations in the future if the trend continues.
Analysts and investors should closely monitor Novanta Inc's interest coverage ratio in the upcoming periods to assess the company's financial health and debt repayment capacity.
Peer comparison
Dec 31, 2023