ADMA Biologics Inc (ADMA)

The interest coverage ratio measures a company's ability to meet its interest expenses with its operating income. A higher ratio indicates a stronger ability to cover interest expenses. Conversely, a lower ratio suggests a potential inability to cover interest costs, which could raise concerns about the company's financial health and ability to service its debt.

In the case of ADMA Biologics Inc, the interest coverage ratio has shown a declining trend over the past five years, with figures of -0.13 in 2023, -2.42 in 2022, -4.49 in 2021, -5.32 in 2020, and -4.37 in 2019. These consistently negative ratios indicate that the company's operating income was insufficient to cover its interest expenses in these years, potentially raising red flags about its financial stability and debt repayment capacity.

The substantial negative interest coverage ratios for ADMA Biologics Inc suggest a high risk of default on interest payments, which could lead to financial distress and difficulties in maintaining creditor relationships. Investors and creditors may view such consistently low ratios as a sign of financial instability, which could impact the company's ability to access additional financing or negotiate favorable borrowing terms in the future.

Overall, the consistently negative interest coverage ratios for ADMA Biologics Inc signal a significant financial risk related to its ability to cover interest expenses and may indicate challenges in managing its debt obligations effectively. It is crucial for the company to improve its operating performance and financial position to enhance its ability to meet interest payments and mitigate potential default risks.

Peer comparison

Dec 31, 2023