Power Integrations Inc (POWI)

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	17,929	35,059	180,412	175,058	70,487
Interest expense	US$ in thousands	—	—	3,014	1,077	4,764
Interest coverage		—	—	59.86	162.54	14.80

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $17,929K ÷ $—K
= —

Interest coverage ratio measures a company's ability to meet its interest payment obligations with its operating income. A higher interest coverage ratio indicates a stronger ability to cover interest payments.

Power Integrations Inc's interest coverage ratio has shown improvement over the years, from 14.80 in December 31, 2020, significantly rising to 162.54 by December 31, 2021. This substantial increase suggests the company's operating income has significantly increased, providing a comfortable cushion to cover interest expenses.

However, there was a notable decrease in the interest coverage ratio to 59.86 by December 31, 2022. While this ratio is still considered healthy, it indicates a decrease in the company's ability to cover its interest expenses compared to the prior year.

The data shows that interest coverage ratios for December 31, 2023, and December 31, 2024 are not available (denoted by "\u2014"). It could be due to missing data or a strategic decision by the company to not disclose this information.

In summary, Power Integrations Inc's interest coverage ratio has shown significant fluctuations over the years, with a strong improvement followed by a slight decline. Investors should closely monitor this ratio in future disclosures to assess the company's ability to meet its interest obligations.