SolarEdge Technologies Inc (SEDG)

Interest coverage

		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	Dec 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	-1,656,738	-588,194	-277,654	40,205	272,623	373,756	259,410	166,120	212,321	194,328	213,875	207,139	195,697	159,677	134,083	157,730	178,662	214,285	229,673	189,946
Interest expense (ttm)	US$ in thousands	7,901	15,802	15,802	39,351	31,724	56,682	70,993	52,893	52,619	19,760	6,175	1,450	6,239	6,407	5,934	5,330	5,303	5,147	4,909	4,746
Interest coverage		-209.69	-37.22	-17.57	1.02	8.59	6.59	3.65	3.14	4.04	9.83	34.64	142.85	31.37	24.92	22.60	29.59	33.69	41.63	46.79	40.02

September 30, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-1,656,738K ÷ $7,901K
= -209.69

The interest coverage ratio for SolarEdge Technologies Inc has shown significant fluctuations over the past few quarters. The company's interest coverage ratio was negative in recent quarters, indicating that the company's earnings before interest and taxes (EBIT) were not sufficient to cover its interest expenses.

The trend reveals a deteriorating interest coverage ratio from a positive figure in the last quarter of 2023 to a substantial negative figure in the third quarter of 2024. This indicates a sharp decline in the company's ability to meet its interest obligations using its operating profits.

The significant negative interest coverage ratios suggest that the company may be highly leveraged or experiencing financial difficulties that impact its ability to generate enough operating income to cover its interest expenses. Investors and creditors may view this trend as a cause for concern, as it indicates heightened financial risk and potential challenges in meeting debt obligations.

It is important for SolarEdge Technologies Inc to closely monitor its interest coverage ratio, improve its profitability, and manage its debt levels to ensure financial stability and meet its financial obligations in the long term.