Teradyne Inc (TER)

Interest coverage

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	454,288	594,906	580,357	504,871	529,379	585,013	666,558	769,092	852,392	921,786	996,538	1,141,548	1,185,450	1,130,971	1,068,157	929,474	902,958	851,557	760,993	630,308
Interest expense (ttm)	US$ in thousands	7,212	3,811	3,966	3,481	3,807	4,010	3,826	12,179	16,688	16,929	40,795	36,243	39,767	49,666	31,258	32,455	33,084	29,699	26,650	23,424
Interest coverage		62.99	156.10	146.33	145.04	139.05	145.89	174.22	63.15	51.08	54.45	24.43	31.50	29.81	22.77	34.17	28.64	27.29	28.67	28.56	26.91

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $454,288K ÷ $7,212K
= 62.99

The interest coverage ratio of Teradyne Inc has fluctuated over the period from March 31, 2020, to December 31, 2024. The ratio measures the company's ability to cover its interest expenses with its earnings before interest and taxes (EBIT).

Teradyne's interest coverage ratio ranged from a low of 22.77 on September 30, 2021, to a high of 174.22 on June 30, 2023. A higher ratio indicates that the company is more capable of meeting its interest obligations using its operating income.

The highest interest coverage ratios, such as 174.22 on June 30, 2023, and 156.10 on September 30, 2024, suggest that Teradyne had a strong ability to service its debt through its operational earnings during those periods. On the other hand, the lower ratios, like 22.77 on September 30, 2021, raise concerns about the company's ability to cover its interest expenses with its current EBIT.

In summary, the interest coverage ratio of Teradyne Inc has shown significant variability over the period, indicating fluctuations in its ability to meet interest payments using its operating income.