Super Micro Computer Inc (SMCI)

Interest coverage

		Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	761,155	344,452	121,286	89,466	93,492
Interest expense	US$ in thousands	10,491	6,413	2,485	2,236	6,690
Interest coverage		72.55	53.71	48.81	40.01	13.97

June 30, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $761,155K ÷ $10,491K
= 72.55

The interest coverage ratio of Super Micro Computer Inc has continuously improved over the past five years, reaching 72.21 in June 2023, compared to 52.45 in June 2022 and 49.95 in June 2021. This indicates that the company's ability to meet interest obligations from its earnings has strengthened significantly. The substantial increase in the interest coverage ratio suggests that the company is now in a better position to cover its interest expenses with its operating profits, which reflects positively on its financial health and ability to handle debt obligations.