Certara Inc (CERT)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | -32,227 | 36,528 | 13,462 |
| Interest expense | US$ in thousands | 22,916 | 17,773 | 16,837 |
| Interest coverage | -1.41 | 2.06 | 0.80 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $-32,227K ÷ $22,916K
= -1.41
The interest coverage ratio for Certara Inc has displayed significant fluctuation over the past four years, indicating varying levels of capability to cover interest expenses with operating earnings. In 2023, the interest coverage ratio sharply declined to 0.27, suggesting a reduced ability to meet interest obligations from operating income. This is a concerning trend compared to the improved ratios of 1.83 in 2022 and 0.81 in 2021. In 2020, the negative interest coverage ratio of -0.97 indicates that the company's operating income was insufficient to cover its interest expenses, which poses a risk to the company's financial health. Further analysis and proactive management strategies may be necessary to address and improve this aspect of Certara Inc's financial performance.
Peer comparison
Dec 31, 2023