Synopsys Inc (SNPS)

Interest coverage

		Oct 31, 2024	Jul 31, 2024	Apr 30, 2024	Jan 31, 2024	Oct 31, 2023	Jul 31, 2023	Apr 30, 2023	Jan 31, 2023	Oct 31, 2022	Jul 31, 2022	Apr 30, 2022	Jan 31, 2022	Oct 31, 2021	Jul 31, 2021	Apr 30, 2021	Jan 31, 2021	Oct 31, 2020	Jul 31, 2020	Apr 30, 2020	Jan 31, 2020
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	1,472,418	1,574,262	1,538,872	1,501,659	1,314,723	1,116,508	1,031,460	1,077,678	1,123,370	1,109,391	1,083,966	959,967	810,038	802,802	826,249	721,183	644,199	583,657	480,987	506,733
Interest expense (ttm)	US$ in thousands	33,677	18,695	7,687	2,238	1,178	1,277	1,374	1,462	1,698	2,403	2,721	3,128	3,367	3,053	3,237	4,276	5,140	5,441	6,714	8,709
Interest coverage		43.72	84.21	200.19	670.98	1,116.06	874.32	750.70	737.13	661.58	461.67	398.37	306.89	240.58	262.96	255.25	168.66	125.33	107.27	71.64	58.18

October 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,472,418K ÷ $33,677K
= 43.72

The interest coverage ratio for Synopsys Inc has shown a generally positive trend over the past few years, indicating the company's strong ability to meet its interest obligations. The ratio has fluctuated significantly, ranging from a low of 43.72 in October 2024 to a high of 1,116.06 in October 2023.

On average, the interest coverage ratio has been well above the industry norm, reflecting Synopsys' solid financial health and profitability. The company's ability to generate earnings significantly higher than its interest expenses is a positive indicator for investors and creditors.

It is important to note that a higher interest coverage ratio signifies a lower financial risk for the company, as it suggests that Synopsys is well-positioned to comfortably cover its interest payments. The consistent improvement in the interest coverage ratio demonstrates the company's strong operational performance and efficient management of its debt obligations.