TTM Technologies Inc (TTMI)

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	122,247	126,810	82,851	75,040	53,104	118,606	177,555	192,856	219,839	153,729	135,289	128,665	122,413	145,394	94,937	107,889	131,348	168,684	231,446	203,015
Interest expense (ttm)	US$ in thousands	47,515	48,525	46,858	46,482	46,965	47,257	48,095	46,963	45,517	44,871	45,079	45,447	45,475	48,214	57,271	64,764	73,156	78,664	79,028	81,327
Interest coverage		2.57	2.61	1.77	1.61	1.13	2.51	3.69	4.11	4.83	3.43	3.00	2.83	2.69	3.02	1.66	1.67	1.80	2.14	2.93	2.50

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $122,247K ÷ $47,515K
= 2.57

Interest coverage measures a company's ability to meet its interest obligations on its outstanding debt. It is calculated by dividing the earnings before interest and taxes (EBIT) by the interest expense.

Based on the data provided for TTM Technologies Inc, the interest coverage ratio fluctuated over the reported periods. It stood at 2.50 as of March 31, 2020, and generally stayed above 2.00 until reaching a lower point of 1.13 on December 31, 2023. A ratio below 1 indicates that the company is not generating enough earnings to cover its interest expenses.

It is beneficial for a company to have a higher interest coverage ratio, typically above 2 or 3, to demonstrate its ability to comfortably meet interest payments. The trend for TTM Technologies Inc showed improvement in the later periods, with the ratio increasing to 2.61 on September 30, 2024, and then plateauing at 2.57 by December 31, 2024.

Investors and creditors often use the interest coverage ratio as an indicator of financial health and risk assessment. A declining ratio may signal potential financial distress, while a consistently high ratio indicates financial stability and the ability to manage debt obligations effectively.