SanDisk Corp (SNDK)
Interest coverage
| Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | Dec 31, 2011 | Sep 30, 2011 | Jun 30, 2011 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 632,720 | 540,838 | 649,948 | 804,913 | 1,113,108 | 1,489,030 | 1,680,777 | 1,711,414 | 1,691,794 | 1,516,149 | 1,343,911 | 1,058,733 | 694,262 | 626,916 | 303,912 | 548,083 | 893,840 | 1,058,220 | 1,058,220 | 1,124,227 |
| Interest expense (ttm) | US$ in thousands | 14,952 | 40,246 | 65,203 | 89,878 | 114,194 | 113,076 | 107,908 | 93,771 | 88,379 | 91,474 | 98,440 | 114,264 | 121,402 | 119,693 | 118,067 | 118,796 | 120,896 | 123,296 | 125,379 | 117,997 |
| Interest coverage | 42.32 | 13.44 | 9.97 | 8.96 | 9.75 | 13.17 | 15.58 | 18.25 | 19.14 | 16.57 | 13.65 | 9.27 | 5.72 | 5.24 | 2.57 | 4.61 | 7.39 | 8.58 | 8.44 | 9.53 |
March 31, 2016 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $632,720K ÷ $14,952K
= 42.32
The interest coverage ratio of SanDisk Corp demonstrates the company's ability to meet its interest obligations with its operating income. From June 2011 to March 2012, the interest coverage ratio ranged from 9.53 to 7.39, indicating a relatively strong ability to cover interest expenses.
However, from June 2012 to September 2012, there was a significant decline in the interest coverage ratio to 2.57, highlighting potential concerns about the company's ability to cover its interest payments. This downward trend continued until December 2012 when the ratio improved to 5.24.
From March 2013 to June 2013, the interest coverage ratio increased significantly, reaching a peak of 19.14 in March 2014. This indicates a strong improvement in the company's ability to cover interest expenses.
Subsequently, from June 2014 to December 2015, there was a gradual decline in the interest coverage ratio, which could raise concerns about the company's ability to meet its interest obligations with its operating income. However, in March 2016, the ratio saw a significant spike to 42.32, indicating a substantial improvement in its ability to cover interest expenses.
Overall, the interest coverage ratio of SanDisk Corp has shown fluctuations over the years, with periods of strength and weakness. Investors and stakeholders should closely monitor this ratio to assess the company's financial health and ability to manage its debt obligations.