Silicon Laboratories Inc (SLAB)

Interest coverage

		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	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	-24,154	73,032	91,038	105,250	119,260	97,824	58,326	15,460	-32,838	-53,888	-68,212	-88,488	-69,826	-183,526	-136,107	-89,788	-88,643	61,830	63,140	66,585
Interest expense (ttm)	US$ in thousands	5,554	6,460	6,628	6,699	6,723	11,502	16,570	21,389	31,033	32,624	34,633	39,925	34,142	31,028	27,550	20,777	20,233	20,392	20,198	20,081
Interest coverage		-4.35	11.31	13.74	15.71	17.74	8.50	3.52	0.72	-1.06	-1.65	-1.97	-2.22	-2.05	-5.91	-4.94	-4.32	-4.38	3.03	3.13	3.32

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-24,154K ÷ $5,554K
= -4.35

Interest coverage is a financial ratio that indicates a company's ability to meet its interest payment obligations on outstanding debt. A higher interest coverage ratio suggests a company is more capable of servicing its debt.

Based on the data provided for Silicon Laboratories Inc, the interest coverage ratio has fluctuated over the reporting periods. The ratio was negative in some quarters, indicating that the company's operating income was insufficient to cover its interest expenses during those periods. However, the trend shows improvement over time, with the ratio generally increasing from negative values to positive values.

In particular, the interest coverage ratio improved significantly from negative values in the first quarters of 2020 and 2021 to positive values in later periods. This improvement suggests that the company's operating performance strengthened, allowing it to cover its interest expenses more comfortably.

The most recent interest coverage ratio for Dec 31, 2023, is -4.35, which is a decline from the previous quarter's ratio of 11.31. This negative ratio indicates that the company's operating income was insufficient to cover its interest expenses in the latest quarter, and it may raise concerns about the company's ability to meet its debt obligations.

Overall, while the trend in interest coverage for Silicon Laboratories Inc has shown improvement over time, the recent decrease in the ratio raises a flag of caution regarding the company's ability to cover its interest expenses. Investors and stakeholders should monitor this ratio closely to assess the company's financial health and debt repayment capabilities.