Biomarin Pharmaceutical Inc (BMRN)
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 | 205,898 | 165,546 | -60,013 | -19,688 | -71,351 |
| Interest expense | US$ in thousands | 17,335 | 15,970 | 15,337 | 29,309 | 23,460 |
| Interest coverage | 11.88 | 10.37 | -3.91 | -0.67 | -3.04 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $205,898K ÷ $17,335K
= 11.88
The interest coverage ratio measures a company's ability to cover its interest payments on outstanding debt with its operating income. A higher ratio indicates a stronger ability to meet interest obligations.
Based on the data provided for Biomarin Pharmaceutical Inc, the interest coverage ratio has improved consistently over the past five years. In 2023, the interest coverage ratio stood at 11.88, indicating that the company's operating income was 11.88 times higher than its interest expenses for the year. This suggests Biomarin Pharmaceutical Inc has a strong capacity to service its debt obligations.
In contrast, the interest coverage ratio was relatively lower in previous years, particularly in 2020 and 2019, where the ratios were negative (-0.67 and -3.04 respectively). A negative ratio implies that the company's operating income was insufficient to cover its interest payments during those years.
The significant improvement in the interest coverage ratio over the years is a positive indicator of Biomarin Pharmaceutical Inc's financial health and ability to manage its debt obligations effectively. It reflects a more stable and sustainable position regarding the company's debt servicing capabilities.
Peer comparison
Dec 31, 2023