Marvell Ratio Analysis.docx - Interest Coverage Ratio Interest coverage ratio(Marvell Technology Group 7000.00 6000.00 5000.00 4000.00 Interest coverage

Marvell Ratio Analysis.docx - Interest Coverage Ratio...

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Interest Coverage Ratio 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 -2000.00 -1000.00 0.00 1000.00 2000.00 3000.00 4000.00 5000.00 6000.00 7000.00 Interest coverage ratio (Marvell Technology Group) Interest coverage ratio Companies that involve lending or borrowing will be exposure to interest rate risk due to the fluctuation of it. Marvell facing interest rate risk as the change of it will affect the company’s bottom line. Thus, interest coverage ratio is important as an indicator to analyse the company. It can be measured by dividing the EBIT of Marvell with its interest expense. The lower ratio indicates that the company will face difficulty in paying the interest expenses. According to the study of line graph above, Marvell first had an upward trend of interest coverage ratio from the year of 2009 to 2011 , which amounted from 10.439 to 199.1005 and then climb up to 6323.6528 which were the highest among ten years. This mean Marvell was doing well in dealing with the payment of interest. However, the company had started to experience a downtrend of interest coverage ratio for the following 3 consecutive years (Year 2012 to Year 2014) which amounted to Year 2012 (857.4224), Year 2013 (550.9591), and Year 2014 (163.5115) . All these sign of ratio indicate that even though the company was not on earning track, it still needs to pay the interest expenses. The fluctuation on interest rate of Bank of America Merrill Lynch is the main factor that affects the interest coverage ratio of Marvell as it had deal with it most of the time. From the past 10 years, the range of interest expenses that Marvell had spent was from the lowest of U$ 144,000 to the highest, U$ 17,994,000 per year.
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Solvency Ratio 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 -1.00 -0.50 0.00 0.50 1.00 1.50 Solvency (Marvell Technology Group) Solvency
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