Gentherm Inc (THRM)

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 107,015 115,077 106,481 77,814 77,439 49,296 48,376 51,790 48,306 66,627 64,510 88,447 115,006 135,032 152,834 111,265 89,217 69,339 51,162 81,116
Interest expense (ttm) US$ in thousands 15,300 15,709 14,367 12,297 13,197 12,453 9,799 9,297 5,722 3,287 3,088 2,288 2,758 3,375 4,119 4,850 4,559 4,375 4,264 4,143
Interest coverage 6.99 7.33 7.41 6.33 5.87 3.96 4.94 5.57 8.44 20.27 20.89 38.66 41.70 40.01 37.10 22.94 19.57 15.85 12.00 19.58

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $107,015K ÷ $15,300K
= 6.99

Gentherm Inc's interest coverage ratio has fluctuated over the past few years, indicating changes in its ability to cover interest expenses with its earnings before interest and taxes (EBIT).

The interest coverage ratio was relatively strong at around 19.58 in March 2020, showing the company had earnings 19.58 times larger than its interest expenses. However, it decreased to 12.00 in June 2020, indicating a slight decline in its ability to cover interest payments.

The ratio improved in the following quarters, reaching 41.70 by December 2021, highlighting the company's significant improvement in covering its interest expenses. However, there was a notable decline in the interest coverage ratio to 5.87 by December 2023, suggesting a significant decrease in Gentherm Inc's ability to service its debt.

As of December 31, 2024, the interest coverage ratio recovered slightly to 6.99, but it remains below the levels seen in earlier periods. This trend indicates fluctuations in the company's profitability and its ability to cover its interest obligations. Gentherm Inc may need to focus on improving its earnings or managing its debt levels to enhance its financial stability in the future.