Varex Imaging Corp (VREX)
Interest coverage
| 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 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 36,800 | 34,000 | 49,000 | 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 |
| Interest expense (ttm) | US$ in thousands | 23,800 | 23,200 | 29,700 | 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 |
| Interest coverage | 1.55 | 1.47 | 1.65 | 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 |
September 30, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $36,800K ÷ $23,800K
= 1.55
The interest coverage ratio for Varex Imaging Corp fluctuated over the past few years, indicating varying levels of ability to cover interest expenses with operating income.
From December 2019 to December 2020, Varex Imaging Corp experienced a positive trend in interest coverage, with the ratio steadily improving from 1.34 to 2.24, reaching a peak in December 2020. This upward trend suggests the company's ability to pay interest expenses from its operating profits was strengthening during this period.
However, the interest coverage ratio continued to decline in the following quarters, showing a decrease to 1.55 in September 2024, indicating a decline in the company's ability to cover its interest obligations. It is worth noting that the ratio dropped below 1 in the first quarter of 2021 and remained negative in the subsequent quarters, indicating that operating income was insufficient to cover interest expenses during those periods.
Overall, the recent downward trend in the interest coverage ratio may raise concerns about Varex Imaging Corp's financial health and its ability to meet interest payment obligations comfortably in the future. Further analysis and monitoring of the company's financial performance will be crucial to understand the factors driving these fluctuations in interest coverage.
Peer comparison
Sep 30, 2024