Qorvo Inc (QRVO)
Interest coverage
Mar 31, 2025 | Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | ||
---|---|---|---|---|---|---|
Earnings before interest and tax (EBIT) | US$ in thousands | -12,429 | 142,805 | 193,092 | 1,244,410 | 882,578 |
Interest expense | US$ in thousands | 78,328 | 69,245 | 68,463 | 63,326 | 75,198 |
Interest coverage | -0.16 | 2.06 | 2.82 | 19.65 | 11.74 |
March 31, 2025 calculation
Interest coverage = EBIT ÷ Interest expense
= $-12,429K ÷ $78,328K
= -0.16
The interest coverage ratio measures a company's ability to meet its interest obligations on its debt. A higher ratio indicates that the company is more capable of servicing its debt.
Looking at Qorvo Inc's interest coverage ratio over the past five years, we see the following data:
- As of March 31, 2021, the interest coverage ratio was 11.74, indicating that the company generated sufficient earnings to cover its interest expenses.
- By March 31, 2022, the interest coverage ratio improved significantly to 19.65, suggesting a stronger ability to meet interest payments.
- However, there was a significant decline in the interest coverage ratio by March 31, 2023, falling to 2.82. This decrease may raise concerns about the company's ability to service its debt obligations with its earnings.
- The trend continued to worsen in the following year, with the interest coverage ratio dropping further to 2.06 as of March 31, 2024, indicating a potential strain on the company's ability to cover interest costs.
- By March 31, 2025, the interest coverage ratio turned negative at -0.16. A negative ratio suggests that the company's earnings are insufficient to cover its interest expenses, raising serious concerns about its financial health and debt repayment capabilities.
In conclusion, Qorvo Inc's interest coverage ratio has experienced fluctuations over the years, with a notable decline in recent periods, indicating a potential risk in meeting its interest obligations. It is crucial for the company to monitor and improve its financial performance to ensure sustainable debt management and overall financial stability.
Peer comparison
Mar 31, 2025