ANI Pharmaceuticals Inc (ANIP)

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	-12,831	3,627	47,321	51,679	46,519	42,778	27,310	3,362	-25,064	-53,223	-56,915	-53,573	-32,512	-8,705	-1,499	-5,702	-16,064	-21,389	-16,667	4,094
Interest expense (ttm)	US$ in thousands	17,602	17,176	21,243	23,687	26,783	28,700	29,566	29,135	28,052	24,986	20,219	16,081	11,922	10,036	10,049	9,874	9,452	9,768	10,594	11,644
Interest coverage		-0.73	0.21	2.23	2.18	1.74	1.49	0.92	0.12	-0.89	-2.13	-2.81	-3.33	-2.73	-0.87	-0.15	-0.58	-1.70	-2.19	-1.57	0.35

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-12,831K ÷ $17,602K
= -0.73

The interest coverage ratio measures a company's ability to meet its interest payment obligations with its earnings. A ratio below 1 indicates that the company is not generating enough operating income to cover its interest expenses.

Based on the data provided for ANI Pharmaceuticals Inc, the interest coverage ratio fluctuated significantly over the period analyzed. From March 31, 2020, to September 30, 2022, the company consistently had negative interest coverage ratios, implying its earnings were insufficient to cover interest expenses during these periods.

However, starting from March 31, 2023, the interest coverage ratio turned positive and showed a steady improvement through June 30, 2024. This indicates that ANI Pharmaceuticals Inc's operating income became sufficient to cover its interest payments, reflecting a positive shift in its financial health and ability to service debt.

Overall, the company's interest coverage ratio improved from negative values to positive values over the period, suggesting a positive trend in its financial performance and a better ability to meet its interest payment obligations. It is important to note that sustained positive interest coverage ratios are essential for long-term financial sustainability and stability in meeting debt obligations.