Amphastar P (AMPH)

Interest coverage

Dec 31, 2024 Sep 30, 2024 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
Earnings before interest and tax (EBIT) (ttm) US$ in thousands 213,323 218,475 238,376 219,268 196,536 187,971 134,021 121,206 116,709 102,100 115,862 106,016 83,631 49,374 18,992 5,312 5,317 11,900 7,451 69,667
Interest expense (ttm) US$ in thousands 6,832 14,764 27,722 35,371 27,158 18,230 5,094 1,889 1,846 1,486 1,447 1,136 885 805 453 402 374 329 176 165
Interest coverage 31.22 14.80 8.60 6.20 7.24 10.31 26.31 64.16 63.22 68.71 80.07 93.32 94.50 61.33 41.92 13.21 14.22 36.17 42.34 422.22

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $213,323K ÷ $6,832K
= 31.22

The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt. A higher interest coverage ratio indicates that the company is more capable of servicing its debt obligations.

Analyzing the interest coverage ratio of Amphastar P from March 2020 to December 2024 shows fluctuations in its ability to cover interest expenses. The interest coverage ratio started at a robust 422.22 in March 2020, indicating a strong ability to cover interest payments over 400 times. However, this ratio declined significantly to 14.22 by December 2020, reflecting a reduced capacity to cover interest expenses.

From December 2020 to March 2023, the interest coverage ratio remained relatively low, hovering around 10 to 70, indicating ongoing challenges in meeting interest payments. Notably, the ratio dipped to as low as 6.20 in March 2024, suggesting a potential strain on the company's finances regarding servicing its debt obligations.

However, in the latter half of 2024, there was an improvement in the interest coverage ratio, rising from 8.60 in June to 31.22 in December 2024. This increase indicates a better ability to cover interest payments compared to the lows experienced earlier in the period.

Overall, the varying interest coverage ratios of Amphastar P suggest fluctuations in its financial health and ability to manage interest expenses over the analyzed period. This trend highlights the importance of monitoring the company's financial performance and debt management strategies to ensure sustainable operations and financial stability.