Varex Imaging Corp (VREX)
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 | 53,900 | 60,100 | 75,400 | 73,800 | 83,600 | 83,800 | 85,900 | 88,900 | 77,700 | 70,200 | 28,500 | -30,200 | -40,300 | -41,700 | -10,000 | 27,400 | 37,200 | 42,300 | 31,800 | 35,300 |
| Interest expense (ttm) | US$ in thousands | 29,100 | 29,300 | 31,500 | 33,600 | 37,400 | 39,800 | 41,200 | 42,400 | 41,700 | 42,100 | 45,800 | 42,100 | 36,300 | 31,400 | 22,300 | 20,500 | 21,400 | 21,100 | 20,900 | 21,200 |
| Interest coverage | 1.85 | 2.05 | 2.39 | 2.20 | 2.24 | 2.11 | 2.08 | 2.10 | 1.86 | 1.67 | 0.62 | -0.72 | -1.11 | -1.33 | -0.45 | 1.34 | 1.74 | 2.00 | 1.52 | 1.67 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $53,900K ÷ $29,100K
= 1.85
The interest coverage ratio measures a company's ability to meet its interest expenses on outstanding debt through its operating income. A higher interest coverage ratio indicates a greater ability to service interest payments.
Looking at the historical trend of Varex Imaging Corp's interest coverage ratio, we observe fluctuations over the period provided. The company's interest coverage improved from negative figures in early 2021 to positive levels in 2022 and the first half of 2023, indicating a better capacity to cover interest expenses with operating income.
It is important to note that the interest coverage ratio dropped significantly in mid-2021, hitting the lowest point in the same period. This may raise concerns about the company's ability to meet its interest obligations during that time.
Overall, Varex Imaging Corp's interest coverage has shown variability but has generally improved from challenging levels in early 2021. Investors and creditors may monitor this ratio closely to assess the company's financial health and risk of default.
Peer comparison
Dec 31, 2023