Bristol-Myers Squibb Company (BMY)
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 | 9,591,000 | 8,927,000 | 9,412,000 | -5,471,000 | 5,610,000 |
| Interest expense | US$ in thousands | 1,166,000 | 1,232,000 | 1,334,000 | 1,420,000 | 656,000 |
| Interest coverage | 8.23 | 7.25 | 7.06 | -3.85 | 8.55 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $9,591,000K ÷ $1,166,000K
= 8.23
The interest coverage ratio for Bristol-Myers Squibb Co. has shown fluctuations over the past five years. In 2023 and 2022, the company's interest coverage stood at 7.03 and 7.39, respectively, indicating its ability to cover interest expenses with operating income. This suggests a stable financial position in these years.
However, in 2021, the interest coverage ratio decreased to 5.53, potentially signaling increased financial risk as the company may have had a more limited ability to cover interest payments using its operating income during that period. This could be a point of concern for stakeholders as a lower interest coverage ratio may indicate potential difficulties in meeting debt obligations.
The interest coverage ratio was notably low in 2020 at 1.53, which may raise alarms about the company's financial health and its ability to service its debt effectively. A low interest coverage ratio can signify heightened financial risk and potential constraints in fulfilling debt obligations.
Conversely, in 2019, Bristol-Myers Squibb Co. boasted a robust interest coverage ratio of 9.01, indicating a strong capacity to cover interest expenses with its operating income. This suggests a healthier financial position compared to the other years analyzed.
Overall, an analysis of Bristol-Myers Squibb Co.'s interest coverage ratios over the past five years reveals varying levels of ability to service debt obligations with operating income, with 2020 as a notable point of financial strain. Stakeholders should consider the trend in this ratio as an important indicator of the company's financial stability and risk profile.
Peer comparison
Dec 31, 2023