Biogen Inc (BIIB)

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	2,156,300	2,168,700	1,580,700	1,576,200	1,543,300	1,838,900	3,346,900	3,931,900	3,926,300	4,144,500	3,083,300	1,838,600	1,862,200	1,411,700	2,040,700	3,999,100	5,215,400	6,550,000	7,354,400	7,090,100
Interest expense (ttm)	US$ in thousands	250,300	261,800	265,800	253,600	246,900	230,200	226,300	243,000	246,600	258,100	264,500	255,100	253,700	243,400	233,400	243,000	222,600	212,600	202,100	183,800
Interest coverage		8.61	8.28	5.95	6.22	6.25	7.99	14.79	16.18	15.92	16.06	11.66	7.21	7.34	5.80	8.74	16.46	23.43	30.81	36.39	38.58

December 31, 2024 calculation

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

Biogen Inc's interest coverage ratio has shown a declining trend over the past few years, starting at a healthy level of 38.58 in March 2020 and steadily decreasing to 8.61 by December 2024. This indicates that the company's ability to cover its interest expenses with its operating income has weakened over time.

The sharp decline in the interest coverage ratio from March 2021 to September 2021, dropping from 16.46 to 5.80, suggests a significant strain on Biogen's ability to meet its interest obligations. Although there was a slight recovery in the ratio in the following quarters, it remained at relatively lower levels compared to previous years.

The fluctuations in the interest coverage ratio may raise concerns about Biogen's financial health and its ability to service its debt obligations comfortably. Investors and creditors may closely monitor this ratio to assess the company's risk of default and make informed decisions regarding their investment or lending strategies.