Synaptics Incorporated (SYNA)

Interest coverage

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	-59,300	181,500	352,300	140,500	179,900
Interest expense	US$ in thousands	65,300	55,500	30,200	29,500	22,500
Interest coverage		-0.91	3.27	11.67	4.76	8.00

June 30, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $-59,300K ÷ $65,300K
= -0.91

The interest coverage ratio of Synaptics Incorporated has fluctuated over the past five years, indicating variability in the company's ability to cover its interest obligations. In Jun 2020, the interest coverage ratio stood at 8.00, suggesting a healthy ability to cover interest expenses. However, the ratio decreased to 4.76 in Jun 2021, indicating that the company's ability to cover interest payments declined. This downward trend continued in Jun 2022 with a further decrease to 11.67. The interest coverage ratio then dropped significantly to 3.27 in Jun 2023, indicating potential difficulties in meeting interest obligations. In Jun 2024, the interest coverage ratio turned negative to -0.91, signaling that the company's operating income was insufficient to cover interest expenses, which raises concerns about the company's financial health and its ability to service its debt. Overall, the trend in Synaptics Incorporated's interest coverage ratio shows inconsistency and warrants further investigation into the company's financial performance and debt management strategies.