Collegium Pharmaceutical Inc (COLL)

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	172,542	159,072	34,366	17,640	56,464
Interest expense	US$ in thousands	73,974	83,339	63,213	21,014	28,882
Interest coverage		2.33	1.91	0.54	0.84	1.95

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $172,542K ÷ $73,974K
= 2.33

The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt.

Analyzing Collegium Pharmaceutical Inc's interest coverage ratio over the past five years, we observe a fluctuating trend:
- As of December 31, 2020, the interest coverage ratio was 1.95, indicating that the company's operating income was nearly twice its interest expense, representing a healthy financial position.
- However, by December 31, 2021, the interest coverage ratio dropped to 0.84, signaling a decrease in the company's ability to cover its interest obligations with its operating income.
- This downward trend continued through December 31, 2022, when the interest coverage ratio further declined to 0.54, reflecting a potential strain on Collegium Pharmaceutical Inc's ability to service its debt.
- There was a notable improvement by December 31, 2023, with the interest coverage ratio increasing to 1.91, suggesting a positive turnaround in the company's financial health.
- By the end of December 31, 2024, the interest coverage ratio rose to 2.33, indicating a significant improvement in the company's ability to cover its interest payments.

Overall, Collegium Pharmaceutical Inc's interest coverage ratio has exhibited variability over the past five years, with periods of both strength and weakness. It is essential for investors and stakeholders to monitor this ratio closely to assess the company's financial stability and debt repayment capacity.