Wolfspeed Inc (WOLF)
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 | -445,300 | -285,900 | -166,800 | -477,400 | -164,800 |
| Interest expense | US$ in thousands | 246,300 | 42,600 | 25,100 | 45,400 | 34,900 |
| Interest coverage | -1.81 | -6.71 | -6.65 | -10.52 | -4.72 |
June 30, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $-445,300K ÷ $246,300K
= -1.81
The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher ratio indicates a stronger ability to meet interest obligations.
The interest coverage ratio for Wolfspeed Inc has shown a declining trend over the past five years, ranging from -1.81 in 2024 to -4.72 in 2020. Negative values indicate that the company's operating income was not sufficient to cover its interest expenses during these periods.
The significant negative ratios in the last few years suggest that Wolfspeed Inc may be facing financial challenges in meeting its interest payments. It is essential for the company to improve its operating performance or reduce its interest expenses to enhance its interest coverage ratio and strengthen its financial position.
Peer comparison
Jun 30, 2024