Biogen Inc (BIIB)

Interest coverage

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	2,156,300	1,543,300	3,926,300	1,862,200	5,215,400
Interest expense	US$ in thousands	250,300	246,900	246,600	253,600	222,500
Interest coverage		8.61	6.25	15.92	7.34	23.44

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $2,156,300K ÷ $250,300K
= 8.61

The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt.

Analyzing Biogen Inc's interest coverage ratio over the last five years, we observe the following trends:

1. As of December 31, 2020, Biogen's interest coverage ratio was 23.44, indicating that the company generated earnings that were more than sufficient to cover its interest expenses. This high ratio suggests a strong financial position.

2. However, by December 31, 2021, the interest coverage ratio decreased significantly to 7.34. This decline may indicate that Biogen's earnings were not as robust relative to its interest obligations, raising concerns about the company's ability to comfortably cover its interest expenses.

3. In the following years, there were fluctuations in the interest coverage ratio. By December 31, 2022, the ratio improved to 15.92, suggesting a better ability to cover interest costs. Yet, by December 31, 2023, the ratio dropped to 6.25, indicating a potential strain on meeting interest payments.

4. By the end of December 31, 2024, the interest coverage ratio increased slightly to 8.61, but it remained relatively lower compared to the 2020 level.

Overall, the trend of fluctuating interest coverage ratios for Biogen Inc suggests varying levels of financial health and the company's ability to fulfill its interest obligations. It is important for stakeholders to closely monitor these ratios to assess Biogen's financial stability and debt repayment capability.