SolarEdge Technologies Inc (SEDG)

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	-1,157,230	82,018	166,120	193,600	168,996
Interest expense	US$ in thousands	1,156	1,269	1,530	6,376	5,330
Interest coverage		-1,001.06	64.63	108.58	30.36	31.71

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $-1,157,230K ÷ $1,156K
= -1,001.06

The interest coverage ratio for SolarEdge Technologies Inc has shown a generally positive trend over the years, indicating the company's ability to meet its interest obligations from its operating income.

As of December 31, 2020, the interest coverage ratio was 31.71, reflecting a healthy level of earnings available to cover interest payments. This ratio slightly decreased to 30.36 by December 31, 2021, but remained at a satisfactory level.

The interest coverage ratio significantly improved to 108.58 by December 31, 2022, suggesting a substantial increase in the company's ability to cover its interest expenses comfortably. This indicates improving financial health and reduced financial risk.

By December 31, 2023, the interest coverage ratio decreased to 64.63, but still remained at a level that indicates the company has adequate earnings to cover its interest obligations.

However, there was a significant anomaly on December 31, 2024, with a negative interest coverage ratio of -1,001.06. This exceptionally low ratio may raise concerns about the company's ability to meet its interest payments from operating income during that period. Further investigation would be required to understand the reasons behind this anomaly.

Overall, the trend in SolarEdge Technologies Inc's interest coverage ratio has been positive, demonstrating the company's ability to manage its interest expenses efficiently, except for the outlier in 2024, which warrants closer attention.