ANI Pharmaceuticals Inc (ANIP)

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	46,971	-35,283	-39,793	-16,016	16,351
Interest expense	US$ in thousands	32,482	28,423	11,947	9,491	13,477
Interest coverage		1.45	-1.24	-3.33	-1.69	1.21

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $46,971K ÷ $32,482K
= 1.45

ANI Pharmaceuticals Inc's interest coverage ratio has been fluctuating over the past five years. In 2023, the interest coverage ratio improved to 1.84, indicating that the company's ability to cover its interest expenses from its operating income has strengthened compared to the previous year. However, it is important to note that in 2022 and 2021, the interest coverage ratios were negative at -0.92 and -2.30, respectively. This suggests that the company's operating income was insufficient to cover its interest expenses during those years, which raises concerns about the financial health and solvency of the company.

Looking back further, in 2020, the interest coverage ratio was also negative at -0.46, indicating a continued struggle to meet interest obligations. However, in 2019, the interest coverage ratio was positive at 1.78, showing a better ability to cover interest payments.

Overall, ANI Pharmaceuticals Inc's interest coverage has been inconsistent, with significant fluctuations in the ability to meet interest expenses from operating income. This variability indicates potential financial instability and the need for the company to closely monitor its debt levels and operating performance to ensure sustainable financial health.