Western Digital Corporation (WDC)

Interest coverage

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	-317,000	-1,248,000	2,427,000	1,253,000	367,000
Interest expense	US$ in thousands	417,000	312,000	304,000	326,000	413,000
Interest coverage		-0.76	-4.00	7.98	3.84	0.89

June 30, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $-317,000K ÷ $417,000K
= -0.76

The interest coverage ratio for Western Digital Corporation has exhibited volatility over the past five years. In 2024, the interest coverage ratio was -0.76, indicating that the company's operating income was insufficient to cover its interest expenses. The negative ratio suggests financial distress and raises concerns about the company's ability to meet its debt obligations.

In the prior year 2023, the interest coverage ratio worsened significantly to -4.00, further highlighting the company's strained financial position. However, there was a notable improvement in 2022, with a positive interest coverage ratio of 7.98, indicating a healthy ability to cover interest payments with operating income.

The year 2021 also showed a relatively decent interest coverage ratio of 3.84, demonstrating improved financial stability compared to the prior years. In contrast, in 2020, the interest coverage ratio was a concerning 0.89, suggesting a tight financial position and potential difficulties in meeting interest obligations.

Overall, Western Digital Corporation's interest coverage ratio has been fluctuating, indicating varying levels of financial strength and stability in managing its interest expenses over the years. Further analysis of the company's financial health and cash flow management practices is recommended to assess its long-term sustainability.