CONMED Corporation (CNMD)

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	200,326	141,077	-41,957	108,590	61,336
Interest expense	US$ in thousands	37,297	39,775	28,905	35,485	44,052
Interest coverage		5.37	3.55	-1.45	3.06	1.39

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $200,326K ÷ $37,297K
= 5.37

Interest coverage ratio is a financial metric that indicates a company's ability to pay its interest expenses on outstanding debt. A higher interest coverage ratio is usually considered favorable as it suggests the company has more earnings available to meet its interest obligations.

Looking at the interest coverage ratios of CONMED Corporation over the past five years, we can observe fluctuations in the company's ability to cover its interest expenses.

1. As of December 31, 2020, the interest coverage ratio was 1.39, indicating that the company's earnings were just enough to cover its interest expenses. This could signal a potential risk as there is little room for error in meeting interest payments.

2. By December 31, 2021, the interest coverage ratio improved significantly to 3.06, showing a stronger ability to cover interest costs. This increase suggests that the company's earnings improved relative to its interest expenses, which is a positive sign for creditors and investors.

3. However, in the following year, by December 31, 2022, the interest coverage ratio dropped to -1.45. A negative interest coverage ratio implies that the company's earnings were insufficient to cover its interest expenses, raising concerns about the company's financial health and its ability to meet debt obligations.

4. Subsequently, by December 31, 2023, the interest coverage ratio rebounded to 3.55, indicating a recovery in the company's ability to pay interest expenses. This improvement suggests that the company may have taken steps to enhance its financial position.

5. Finally, as of December 31, 2024, the interest coverage ratio further increased to 5.37, reflecting a strengthening ability to cover interest costs and potentially signaling improved financial performance.

In summary, while CONMED Corporation experienced fluctuations in its interest coverage ratio over the past five years, the trend towards higher ratios in recent years is a positive sign of improved financial stability and capacity to meet interest obligations. However, monitoring this ratio consistently is crucial to assess the company's ongoing ability to service its debt and manage financial risks effectively.