Avanos Medical Inc (AVNS)
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 | -44,800 | 75,200 | 10,600 | -47,300 | -49,000 |
| Interest expense | US$ in thousands | 15,000 | 10,000 | 3,300 | 15,600 | 15,000 |
| Interest coverage | -2.99 | 7.52 | 3.21 | -3.03 | -3.27 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $-44,800K ÷ $15,000K
= -2.99
The interest coverage ratio of Avanos Medical Inc has shown fluctuation over the past five years. In 2023, the interest coverage ratio was 1.45, indicating that the company's operating income was sufficient to cover its interest expenses. This ratio has decreased compared to the previous two years, potentially signaling that the company's ability to cover interest payments has weakened.
In 2022 and 2021, Avanos Medical Inc had strong interest coverage ratios of 8.81 and 10.23, respectively, demonstrating a robust ability to meet its interest obligations with its operating earnings. These ratios suggest that the company was in a solid financial position during those years.
On the other hand, in 2020, the interest coverage ratio dropped significantly to 0.40, indicating that Avanos Medical Inc may have faced challenges in meeting its interest payments with its operating income alone. The lowest point was in 2019, with a negative interest coverage ratio of -4.17, implying that the company's operating income was insufficient to cover its interest expenses, raising concerns about its financial health.
Overall, the trend in Avanos Medical Inc's interest coverage ratio suggests variability in its ability to cover interest expenses with operating income, highlighting the importance of monitoring the company's financial performance and leverage levels.
Peer comparison
Dec 31, 2023