Super Micro Computer Inc (SMCI)
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 | 871,071 | 712,995 | 761,225 | 702,355 | 699,024 | 542,182 | 344,460 | 213,142 | 137,247 | 119,909 | 121,278 | 95,282 | 91,900 | 84,936 | 89,498 | 106,566 | 103,554 | 101,746 | 93,492 | 107,236 |
| Interest expense (ttm) | US$ in thousands | 14,791 | 8,416 | 10,491 | 9,910 | 10,153 | 9,547 | 6,413 | 4,120 | 3,196 | 2,615 | 2,485 | 2,456 | 2,367 | 2,358 | 2,236 | 2,840 | 3,593 | 4,864 | 6,690 | 6,395 |
| Interest coverage | 58.89 | 84.72 | 72.56 | 70.87 | 68.85 | 56.79 | 53.71 | 51.73 | 42.94 | 45.85 | 48.80 | 38.80 | 38.83 | 36.02 | 40.03 | 37.52 | 28.82 | 20.92 | 13.97 | 16.77 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $871,071K ÷ $14,791K
= 58.89
Super Micro Computer Inc's interest coverage ratio has shown a generally positive trend over the past eight quarters, indicating the company's ability to comfortably meet its interest obligations from its operating profits. The interest coverage ratio has consistently remained above 50, with the most recent quarter reporting a robust interest coverage of 58.85. This suggests that the company's operating income is significantly higher than its interest expenses, providing a cushion to cover its debt payments.
The increasing trend in the interest coverage ratio from Q3 2022 to Q2 2024 reflects the company's improving ability to service its debt. A higher interest coverage ratio is typically seen as a positive sign by investors and lenders, as it indicates a lower risk of default due to insufficient earnings to cover interest payments.
Super Micro Computer Inc's interest coverage ratio has exceeded 50 for the past eight quarters, highlighting the company's strong financial position and ability to manage its debt obligations effectively. Overall, the consistent and increasing interest coverage ratio indicates a healthy financial performance and a lower risk profile for the company in terms of debt servicing.
Peer comparison
Dec 31, 2023