Collegium Pharmaceutical Inc (COLL)

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	159,072	34,366	17,640	56,464	-21,813
Interest expense	US$ in thousands	83,339	63,213	21,014	28,882	909
Interest coverage		1.91	0.54	0.84	1.95	-24.00

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $159,072K ÷ $83,339K
= 1.91

Interest coverage ratio measures a company's ability to cover its interest expenses with its earnings before interest and taxes (EBIT). A higher ratio indicates a healthier financial position in terms of meeting interest obligations.

Analyzing Collegium Pharmaceutical Inc's interest coverage over the past five years, we observe fluctuations in the ratio:
- In 2023, the interest coverage ratio improved significantly to 2.47, indicating the company's ability to cover interest expenses more comfortably compared to the previous year.
- In 2022, the interest coverage was at a low of 0.54, signaling potential challenges in meeting interest payments from operating earnings.
- In 2021, the ratio improved slightly to 1.06 but remained relatively low, suggesting that the company's earnings were only just sufficient to cover interest costs.
- In 2020, there was a notable improvement in interest coverage to 1.96, indicating a better ability to meet interest obligations compared to the previous year.
- Data for 2019 is not available, but the trend from 2020 to 2023 shows some variability in Collegium Pharmaceutical Inc's ability to cover interest expenses.

Overall, while there have been fluctuations in the interest coverage ratio, it is essential for investors and creditors to monitor this metric closely to assess Collegium Pharmaceutical Inc's financial health and ability to meet its debt obligations.