Power Integrations Inc (POWI)

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 17,929 12,959 19,089 29,772 35,059 57,002 87,661 135,122 180,412 203,824 201,045 185,919 175,058 158,481 127,630 95,579 70,487 226,403 229,160 225,995
Interest expense (ttm) US$ in thousands 0 1,714 1,714 1,714 3,428 2,499 3,500 4,174 3,014 2,229 1,228 554 0 0 0 0 0 0 0 0
Interest coverage — 7.56 11.14 17.37 10.23 22.81 25.05 32.37 59.86 91.44 163.72 335.59 — — — — — — — —

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $17,929K ÷ $0K
= —

Power Integrations Inc's interest coverage ratio has shown a fluctuating trend over the reported periods. The interest coverage ratio was not available for analysis until the third quarter of 2022 when it stood at 91.44. This indicates that the company's operating income was 91.44 times higher than its interest expenses during that period.

The interest coverage ratio improved further in the following quarters, reaching 32.37 in the first quarter of 2023, suggesting a solid ability to meet interest obligations. However, there was a notable decline in the second and third quarters of 2023, with ratios of 25.05 and 22.81, respectively.

In the fourth quarter of 2023, the interest coverage ratio decreased further to 10.23, indicating a potential strain on the company's ability to cover its interest expenses with operating income. Subsequently, in the first quarter of 2024, there was a slight improvement with a ratio of 17.37, followed by a decrease to 11.14 in the second quarter of 2024. Finally, as of the third quarter of 2024, the interest coverage ratio stood at 7.56.

The declining trend in the interest coverage ratio over the mentioned periods may indicate a potential risk for Power Integrations Inc in servicing its interest obligations from operating income. Investors and creditors may interpret this fluctuation as a signal to monitor the company's financial health closely, especially its ability to generate sufficient income to cover interest expenses.