Gentherm Inc (THRM)

Interest coverage

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	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	84,260	83,064	78,448	73,984
Interest expense (ttm)	US$ in thousands	-2,489	5,717	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	4,763	5,037	5,130	5,130
Interest coverage		—	8.62	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	17.69	16.49	15.29	14.42

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $77,439K ÷ $-2,489K
= —

The interest coverage ratio for Gentherm Inc has shown fluctuations over the past eight quarters. In Q4 2023, the interest coverage ratio was 6.95, indicating that the company generated nearly 7 times the earnings needed to cover its interest expenses for that quarter. While this figure is relatively healthy, it has decreased from the previous quarter where it was 6.31.

Looking further back, the interest coverage ratio was highest in Q2 2022 at 40.08, a significant increase from the previous quarter. This exceptional ratio suggests the company had ample earnings to cover its interest obligations during that period. However, the ratio has since experienced a downward trend, reaching its lowest point in Q3 2022 at 36.26, before stabilizing and showing intermittent fluctuations in subsequent quarters.

A higher interest coverage ratio indicates a company's ability to handle its interest payments with ease, while a lower ratio may signal potential financial distress. Therefore, while the recent ratios for Gentherm Inc have fluctuated, overall, the company has generally maintained a healthy interest coverage position, ensuring it can meet its interest obligations from its operating earnings.