Wolfspeed Inc (WOLF)

Interest coverage

		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	Sep 30, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	-649,100	-600,300	-595,900	-598,500	-286,000	-148,200	-124,300	-125,000	-166,800	-340,800	-380,500	-368,400	-477,400	-371,000	-329,400	-305,200	-163,000	-276,300	-434,800	-377,700
Interest expense (ttm)	US$ in thousands	246,300	201,400	156,000	99,500	42,600	34,700	25,700	23,200	25,100	26,300	32,400	39,000	45,400	48,500	44,800	40,600	34,900	29,800	29,700	28,669
Interest coverage		-2.64	-2.98	-3.82	-6.02	-6.71	-4.27	-4.84	-5.39	-6.65	-12.96	-11.74	-9.45	-10.52	-7.65	-7.35	-7.52	-4.67	-9.27	-14.64	-13.17

June 30, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-649,100K ÷ $246,300K
= -2.64

The interest coverage ratio for Wolfspeed Inc has been consistently low over the past few quarters, indicating a potential financial risk. The negative values recorded suggest that the company's operating income is insufficient to cover its interest expenses. This trend may signal financial distress or liquidity challenges for the company, as it indicates a lack of earnings to meet interest obligations. Investors and creditors should closely monitor this metric as it is a key indicator of the company's ability to service its debt and could potentially impact its creditworthiness. Further analysis of the company's financial health and ability to generate sustainable earnings and cash flows is warranted to assess the long-term viability of Wolfspeed Inc.