ON Semiconductor Corporation (ON)

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	1,795,600	2,013,000	2,281,100	2,590,000	2,608,700	2,773,500	2,490,500	2,378,400	2,455,500	2,162,400	2,135,300	1,805,100	1,286,600	950,400	666,700	452,900	342,800	305,800	141,500	259,000
Interest expense (ttm)	US$ in thousands	11,100	25,000	37,600	64,000	74,800	86,500	94,000	99,700	94,900	99,400	107,600	118,600	130,400	140,200	150,500	159,300	168,400	168,800	167,300	159,100
Interest coverage		161.77	80.52	60.67	40.47	34.88	32.06	26.49	23.86	25.87	21.75	19.84	15.22	9.87	6.78	4.43	2.84	2.04	1.81	0.85	1.63

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,795,600K ÷ $11,100K
= 161.77

The interest coverage ratio of ON Semiconductor Corporation has shown a steady improvement over the past few years, indicating the company's ability to meet its interest payments comfortably. The ratio has increased from a low of 0.85 in June 2020 to a high of 161.77 in December 2024. This upward trend is a positive sign of the company's improving financial health and its increasing ability to cover its interest expenses with its operating income.

The company's interest coverage ratio exceeded 1 in all reported periods, indicating that ON Semiconductor Corporation generated enough operating income to cover its interest expenses. Particularly, in recent quarters, the interest coverage ratio has significantly strengthened, reaching its peak at 161.77 in December 2024, which signifies a robust ability to service its debt obligations.

Overall, the improving trend in ON Semiconductor Corporation's interest coverage ratio reflects the company's enhanced financial position and reduced financial risk, which may be viewed positively by investors and creditors alike.