Sonos Inc (SONO)
Interest coverage
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | -48,046 | 5,127 | 69,282 | 157,517 | -18,596 |
| Interest expense | US$ in thousands | 441 | 733 | 552 | 592 | 1,487 |
| Interest coverage | -108.95 | 6.99 | 125.51 | 266.08 | -12.51 |
September 30, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $-48,046K ÷ $441K
= -108.95
The interest coverage ratio reflects Sonos Inc's ability to meet its interest obligations with its operating income. In analyzing the trend over the past five years, we observe the following:
- In 2024, the interest coverage ratio was negative at -108.95, indicating that Sonos Inc's operating income was insufficient to cover its interest expenses. This may raise concerns about the company's financial health and its ability to service its debt obligations.
- In 2023, the interest coverage improved to 6.99, indicating that Sonos Inc's operating income was able to cover its interest expenses almost 7 times over. This suggests a stronger financial position compared to the previous year.
- By 2022, the interest coverage ratio significantly improved to 125.51, showing a substantial increase in the company's ability to meet its interest obligations comfortably.
- In 2021, the interest coverage ratio remained high at 266.08, indicating a strong ability to pay interest expenses with operating income, reflecting sound financial health.
- However, in 2020, the interest coverage ratio was negative at -12.51, which raises concerns about the company's financial stability and ability to service its debt.
Overall, Sonos Inc's interest coverage ratio has shown significant fluctuations over the past five years, with two years of negative ratios. These fluctuations suggest potential volatility in the company's ability to cover its interest expenses with operating income, warranting further investigation into the underlying factors impacting its financial performance.
Peer comparison
Sep 30, 2024