SolarEdge Technologies Inc (SEDG)
Interest coverage
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 | Sep 30, 2019 | ||
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Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | -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 | 104,642 |
Interest expense (ttm) | US$ in thousands | 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 | 1,278 |
Interest coverage | -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 | 81.88 |
June 30, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-588,194K ÷ $15,802K
= -37.22
The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio indicates a stronger ability to meet interest obligations.
Looking at SolarEdge Technologies Inc's interest coverage ratio over the past few quarters, we see a significant fluctuation. The company experienced negative interest coverage in recent quarters, indicating that its operating income was insufficient to cover its interest expenses.
Specifically, in June 2024 and March 2024, the interest coverage ratios were -37.22 and -17.57, respectively, which suggest a concerning trend of inadequate coverage of interest payments by operating income.
However, in previous periods, such as December 2023 to September 2023, the interest coverage ratios were positive, indicating that the company had improved its ability to cover interest expenses with its operating income.
It is important to note the substantial improvement in the interest coverage ratio from March 2022 to June 2022, where the ratio increased significantly from 34.64 to 46.79, showing a strong ability to cover interest expenses during that period.
Overall, SolarEdge Technologies Inc's interest coverage ratio has shown variability over the past quarters, with some periods of strong coverage and others of insufficient coverage. It is crucial for the company to sustain a healthy interest coverage ratio to ensure its financial stability and ability to meet its debt obligations.
Peer comparison
Jun 30, 2024
See also:
SolarEdge Technologies Inc Interest Coverage (Quarterly Data)