Plexus Corp (PLXS)

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	158,380	161,916	149,831	178,688	192,555	200,489	222,082	200,646	174,136	154,263	143,164	158,792	174,693	181,741	191,269	158,884	151,568	139,106	126,905	140,812
Interest expense (ttm)	US$ in thousands	28,876	31,429	32,271	32,265	31,542	28,956	24,648	19,706	15,858	13,473	12,740	13,213	14,253	15,322	16,120	16,116	16,162	15,682	15,405	14,736
Interest coverage		5.48	5.15	4.64	5.54	6.10	6.92	9.01	10.18	10.98	11.45	11.24	12.02	12.26	11.86	11.87	9.86	9.38	8.87	8.24	9.56

September 30, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $158,380K ÷ $28,876K
= 5.48

The interest coverage ratio for Plexus Corp has shown a fluctuating trend over the past few years, ranging from 4.64 to 12.26. Generally, a higher interest coverage ratio indicates that the company is better positioned to meet its interest obligations with its operating income.

Analyzing the data, we can see that the interest coverage ratio has been relatively healthy, consistently above 5 in recent years. This implies that Plexus Corp has generated sufficient operating income to cover its interest expenses.

There was a notable peak in the interest coverage ratio in the first quarter of 2023 at 12.26, which may suggest a period of strong profitability relative to interest expenses. Subsequently, the ratio experienced a slight decline but remained above 10 until the end of 2023.

It is worth noting that the interest coverage ratio dipped below 10 in the second half of 2023 and remained in the range of 8 to 9 in the following quarters. While still considered satisfactory, this downward trend warrants monitoring to ensure the company's ability to comfortably service its interest payments.

In conclusion, Plexus Corp's interest coverage ratio has generally been at a healthy level, indicating the company's ability to comfortably meet its interest obligations. However, the recent decline in the ratio highlights the importance of ongoing financial management and monitoring of profitability to sustain a strong interest coverage position.