Amedisys Inc (AMED)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 55,452 | 193,066 | 182,472 | 289,756 | 221,857 |
| Interest expense | US$ in thousands | 30,764 | 31,274 | 22,228 | 9,525 | 11,038 |
| Interest coverage | 1.80 | 6.17 | 8.21 | 30.42 | 20.10 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $55,452K ÷ $30,764K
= 1.80
The interest coverage ratio measures a company's ability to meet its interest obligations with its operating income. A higher ratio indicates better financial health and lower risk of default.
For Amedisys Inc, the interest coverage ratio has fluctuated over the years:
- In December 2020, the ratio was 20.10, indicating that the company generated 20.10 times more operating income than the interest expenses.
- By December 2021, the ratio improved to 30.42, showing a stronger ability to cover interest payments.
- However, there was a decline in December 2022, with the ratio dropping to 8.21, which could signal a decrease in profitability relative to interest obligations.
- The trend continued in December 2023, with the ratio further decreasing to 6.17, possibly indicating a tighter financial position.
- The ratio hit its lowest point by December 2024, standing at 1.80, suggesting a significant strain on the company's ability to cover interest expenses.
Overall, the declining trend in Amedisys Inc's interest coverage ratio raises concerns about its ability to meet interest payments from operating income. Further analysis of the company's financial position and profitability would be necessary to understand the reasons behind this trend and assess the associated risks.
Peer comparison
Dec 31, 2024