Sandisk Corp (SNDK)
Interest coverage
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | — | -444,000 | -1,295,000 | 1,216,000 | 544,576 |
| Interest expense | US$ in thousands | 63,000 | 40,000 | 31,000 | — | 14,952 |
| Interest coverage | 0.00 | -11.10 | -41.77 | — | 36.42 |
June 30, 2025 calculation
Interest coverage = EBIT ÷ Interest expense
= $—K ÷ $63,000K
= 0.00
The interest coverage ratio for Sandisk Corp, as reflected in the provided data, demonstrates a significant deterioration over the analyzed period. As of December 31, 2015, the company maintained a robust interest coverage ratio of 36.42, indicating a strong capacity to meet interest obligations with its earnings before interest and taxes (EBIT). However, data for June 30, 2022, is unavailable or not applicable, suggesting possible changes in reporting or data collection issues for that period.
By June 30, 2023, the interest coverage ratio has declined sharply into negative territory, registering at -41.77. A negative interest coverage ratio typically indicates that the company's EBIT has fallen below zero, meaning the company is experiencing operating losses or insufficient income to cover its interest expenses, and thus, is unable to meet interest payments from operational earnings. This extreme decline suggests a significant deterioration in financial health and liquidity, raising concerns regarding the company's ability to service debt without additional revenue or restructuring efforts.
The trend continues into June 30, 2024, with the ratio slightly improving yet remaining deeply negative at -11.10. Although less severe than the previous period, a negative ratio still signals persistent operating losses relative to interest obligations.
By June 30, 2025, the interest coverage ratio reaches zero, implying that EBIT is approximately equal to interest expenses; in practical terms, the company's earnings are just enough, but not exceeding, its interest obligations. This indicates an imminent risk of financial distress, as any further downturns or unforeseen expenses could impede the company's ability to meet its interest commitments.
In summary, from a robust position in 2015, Sandisk Corp's interest coverage has experienced a drastic decline, transitioning from a highly comfortable ratio to negative territory and then to zero, reflecting severe operational and financial challenges. These trends emphasize the importance of assessing the company's operational efficiency, revenue streams, and debt management strategies moving forward.
Peer comparison
Jun 30, 2025