Qorvo Inc (QRVO)

Interest coverage

Mar 31, 2025 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
Earnings before interest and tax (EBIT) (ttm) US$ in thousands 104,257 155,815 62,054 193,596 142,805 24,353 64,854 171,991 303,208 639,725 923,976 1,027,314 1,244,410 1,281,745 1,224,172 1,080,622 882,578 663,952 623,074 514,198
Interest expense (ttm) US$ in thousands 78,328 75,625 74,551 69,078 69,245 69,204 68,689 68,472 68,463 68,614 66,876 65,299 63,326 61,344 63,469 71,628 75,198 78,723 78,170 67,377
Interest coverage 1.33 2.06 0.83 2.80 2.06 0.35 0.94 2.51 4.43 9.32 13.82 15.73 19.65 20.89 19.29 15.09 11.74 8.43 7.97 7.63

March 31, 2025 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $104,257K ÷ $78,328K
= 1.33

The interest coverage ratio of Qorvo Inc has demonstrated fluctuations over the periods discussed. It started at a healthy level of 7.63 for June 30, 2020, indicating that the company's operating income was sufficient to cover its interest expenses by approximately 7.63 times.

The interest coverage ratio improved gradually over the subsequent quarters, reaching its peak at 20.89 for December 31, 2021, indicating a strong ability to cover interest payments with operating income. However, from March 31, 2022, the interest coverage ratio began to decline.

By September 30, 2024, the interest coverage ratio had dropped significantly to 0.83, which suggests that Qorvo Inc may have been facing challenges in generating enough operating income to cover its interest expenses adequately. Subsequently, there was a slight recovery in the interest coverage ratio to 2.06 by December 31, 2024.

Overall, a downward trend in the interest coverage ratio from the peak in December 31, 2021, to September 30, 2024, followed by a slight recovery, indicates potential concerns about the company's ability to comfortably meet its interest obligations with operating income during certain periods. Monitoring this ratio is crucial to understanding Qorvo Inc's financial health and ability to manage its debt obligations effectively.