Varex Imaging Corp (VREX)
Interest coverage
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 60,100 | 83,800 | 70,200 | -41,700 | 42,300 |
| Interest expense | US$ in thousands | 29,300 | 39,800 | 42,100 | 31,400 | 21,100 |
| Interest coverage | 2.05 | 2.11 | 1.67 | -1.33 | 2.00 |
September 30, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $60,100K ÷ $29,300K
= 2.05
The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher ratio indicates that the company is more capable of meeting its interest obligations. In the case of Varex Imaging Corp, the interest coverage ratios for the five most recent years are as follows:
- Sep 30, 2023: 2.05
- Sep 30, 2022: 2.11
- Sep 30, 2021: 1.67
- Sep 30, 2020: -1.33
- Sep 30, 2019: 2.00
Varex Imaging Corp's interest coverage has been generally positive in recent years, indicating that the company's operating income has been sufficient to cover its interest expenses. The ratios for 2023 and 2022 are above 2, which is considered a healthy level. In 2021, the ratio was slightly lower at 1.67 but still within an acceptable range. However, in 2020, the company experienced a negative interest coverage ratio of -1.33, which indicates that its operating income was insufficient to cover its interest expenses during that period. It is important for investors and stakeholders to monitor this ratio closely to ensure the company's ability to meet its debt obligations in the future.
Peer comparison
Sep 30, 2023