Silicon Laboratories Inc (SLAB)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | -24,154 | 119,260 | -32,838 | -107,088 | -88,643 |
| Interest expense | US$ in thousands | 5,554 | 6,723 | 31,033 | 34,142 | 20,233 |
| Interest coverage | -4.35 | 17.74 | -1.06 | -3.14 | -4.38 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $-24,154K ÷ $5,554K
= -4.35
The interest coverage ratio measures the extent to which a company can cover its interest expenses with its operating income. A higher interest coverage ratio indicates better ability to meet interest obligations.
Based on the data provided for Silicon Laboratories Inc, the interest coverage ratio has been volatile over the past five years. In 2023, the interest coverage ratio was -4.35, indicating that the company's operating income was insufficient to cover its interest expenses. This signifies a concerning situation where the company may be facing challenges in meeting its interest obligations.
In comparison, the interest coverage ratios for the previous years show fluctuations as well, with 2022 showing a relatively strong ratio of 17.74, while 2021, 2020, and 2019 had negative ratios (-1.06, -3.14, and -4.38 respectively), implying potential difficulties in meeting interest payments in those years.
Overall, the significant negative interest coverage ratio in 2023 raises concerns about Silicon Laboratories Inc's ability to service its debt obligations using its current operating income. Investors and creditors may view this as a risk factor indicating the need for the company to improve its profitability or manage its debt levels more effectively.
Peer comparison
Dec 31, 2023