Gentherm Inc (THRM)

Interest coverage

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	77,439	48,307	115,006	89,217	84,260
Interest expense	US$ in thousands	28	16	2,758	4,559	4,763
Interest coverage		2,765.68	3,019.19	41.70	19.57	17.69

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $77,439K ÷ $28K
= 2,765.68

The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt with its operating income. A higher ratio indicates a stronger ability to cover interest expenses.

Looking at Gentherm Inc's interest coverage ratios over the past five years, we can observe the following trends:

- In 2023, the interest coverage ratio was 6.95, indicating that the company's operating income was able to cover its interest expenses 6.95 times over. This represents a decrease from the previous year.
- In 2022, the interest coverage ratio was 12.86, which was a substantial decrease from 43.10 in 2021. Despite the decrease, the ratio still reflects a strong ability to cover interest payments.
- In 2021, Gentherm Inc had a high interest coverage ratio of 43.10, indicating a robust ability to meet interest obligations.
- In 2020 and 2019, the interest coverage ratios were also relatively high at 20.84 and 20.40 respectively, signaling a consistent ability to cover interest expenses.

Overall, the fluctuation in Gentherm Inc's interest coverage ratios indicates some variability in the company's ability to cover interest payments over the years. It is important to further investigate the reasons behind the fluctuations to assess the company's financial health and sustainability in meeting its debt obligations.