Certara Inc (CERT)
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 | -38,704 | -32,227 | 36,528 | 13,462 | -24,885 |
| Interest expense | US$ in thousands | 21,520 | 22,916 | 17,773 | 16,837 | 25,296 |
| Interest coverage | -1.80 | -1.41 | 2.06 | 0.80 | -0.98 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $-38,704K ÷ $21,520K
= -1.80
The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt. A higher ratio indicates a stronger ability to cover interest expenses with operating income.
Analyzing Certara Inc's interest coverage from December 31, 2020 to December 31, 2024 shows fluctuations in its ability to cover interest expenses.
- As of December 2020, Certara Inc had an interest coverage ratio of -0.98, indicating that its operating income was insufficient to cover its interest payments.
- By December 2021, the interest coverage improved to 0.80, but still remained below 1, suggesting continued challenges in meeting interest obligations.
- The ratio further improved to 2.06 by December 2022, indicating a better ability to cover interest expenses with operating income.
- However, by December 2023, the interest coverage ratio declined to -1.41, showing a decrease in Certara Inc's ability to cover interest payments.
- The trend continued into December 2024, with a further decrease in the interest coverage ratio to -1.80, indicating a continued struggle to meet interest obligations.
Overall, Certara Inc's interest coverage ratio demonstrates variability over the period, with periods of improvement but also challenges in covering interest expenses with operating income. Maintaining a sustainable interest coverage ratio is important for the company's financial health and ability to meet debt obligations.
Peer comparison
Dec 31, 2024