Photronics Inc (PLAB)

Interest coverage

		Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020	Oct 31, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	253,050	211,866	94,554	63,928	52,121
Interest expense	US$ in thousands	426	522	610	100	1,425
Interest coverage		594.01	405.87	155.01	639.28	36.58

October 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $253,050K ÷ $426K
= 594.01

The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt. Photronics, Inc.'s interest coverage has shown a consistently increasing trend over the past five years, reaching a substantial level of 584.41 as of October 31, 2023. This indicates a strong ability to cover interest expenses, reflecting the company's earnings power relative to its fixed interest obligations. The remarkable improvement in interest coverage suggests a favorable financial position and a reduced risk of default on debt obligations. The significant increase in the interest coverage ratio demonstrates the potential for enhanced financial stability and the ability to allocate earnings towards servicing debt obligations.