Amgen Inc (AMGN)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 7,897,000 | 9,566,000 | 7,639,000 | 9,139,000 | 9,674,000 |
| Interest expense | US$ in thousands | 2,875,000 | 1,406,000 | 1,197,000 | 1,262,000 | 1,289,000 |
| Interest coverage | 2.75 | 6.80 | 6.38 | 7.24 | 7.51 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $7,897,000K ÷ $2,875,000K
= 2.75
Interest coverage ratio measures a company's ability to pay interest expenses on its outstanding debt. A higher interest coverage ratio indicates that the company is more capable of meeting its interest payments. Analyzing the data for AMGEN Inc. over the past five years, we observe a declining trend in the interest coverage ratio. In 2023, the interest coverage ratio stands at 2.75, significantly lower than the ratios in the preceding years, indicating a decrease in the company's ability to cover its interest obligations.
The substantial decrease in the interest coverage ratio from 6.80 in 2022 to 2.75 in 2023 suggests a potential challenge for AMGEN Inc. in meeting its interest expenses from its earnings. This decline could be attributed to various factors such as a significant increase in interest expenses or a decrease in operating income. It is essential for investors and stakeholders to closely monitor this trend to assess the company's financial health and ability to manage its debt obligations effectively.
Peer comparison
Dec 31, 2023