Avantor Inc (AVTR)

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 1,081,700 628,400 714,100 610,700 695,300 755,000 821,700 1,039,800 1,116,900 1,073,200 1,038,200 1,014,100 970,400 852,100 568,900 473,600 369,900 435,400 613,600 507,300
Interest expense (ttm) US$ in thousands 11,200 239,200 262,900 275,400 284,800 289,300 284,200 274,700 265,800 256,800 243,600 230,700 217,400 212,400 223,500 264,600 307,600 349,800 382,900 405,900
Interest coverage 96.58 2.63 2.72 2.22 2.44 2.61 2.89 3.79 4.20 4.18 4.26 4.40 4.46 4.01 2.55 1.79 1.20 1.24 1.60 1.25

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,081,700K ÷ $11,200K
= 96.58

Avantor Inc's interest coverage ratio has displayed fluctuations over the past few years. The interest coverage ratio indicates the company's ability to meet its interest obligations on outstanding debt with its operating income.

In March 2020, the interest coverage ratio stood at 1.25, suggesting that the company's operating income was just sufficient to cover its interest expenses. Subsequently, the ratio improved to 1.60 by June 2020, indicating a slightly stronger ability to cover interest payments.

The trend continued in September and December 2020, with the interest coverage ratios remaining above 1, but saw a slight decline to 1.20. However, from March 2021 onwards, there was a significant improvement in the interest coverage ratio. By December 2021, the ratio had increased to 4.46, demonstrating a much healthier ability to pay interest expenses from operating income.

Over the next few periods, the interest coverage ratio maintained a strong position above 4, indicating a comfortable buffer in meeting interest payments. However, there was a notable decrease in the ratio by December 2023 to 2.44, and it further declined to 2.22 by March 2024. This suggests that the company's operating income may not be as robust relative to its interest obligations during these periods.

Notably, in December 2024, there was a significant spike in the interest coverage ratio to 96.58. Such a substantial deviation from previous periods may warrant further investigation to ensure the accuracy of the financial data provided.

Overall, it is crucial for investors and creditors to monitor Avantor Inc's interest coverage ratio closely to assess the company's financial health and ability to meet its debt obligations. fluctuations in this ratio can provide valuable insights into the company's financial stability and risk profile.