Charles River Laboratories (CRL)
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 | 227,347 | 712,248 | 675,896 | 546,765 | 532,545 |
| Interest expense | US$ in thousands | 126,288 | 136,710 | 59,291 | 73,910 | 86,433 |
| Interest coverage | 1.80 | 5.21 | 11.40 | 7.40 | 6.16 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $227,347K ÷ $126,288K
= 1.80
To analyze Charles River Laboratories' interest coverage, we first observe a gradual increase from 6.16 in December 2020 to 7.40 in December 2021, indicating an improvement in the company's ability to cover its interest obligations. Additionally, by December 2022, the interest coverage ratio significantly rises to 11.40, reaching a peak over the specified period. This signifies a strong ability to meet interest payments with operating income.
However, there is a notable decline in the interest coverage ratio to 5.21 by December 2023, suggesting a potential decrease in the company's capacity to cover interest expenses. Furthermore, the ratio drops further to 1.80 by December 2024, indicating a significant decrease in the company's ability to service its interest obligations with its operating income.
Overall, the trend in Charles River Laboratories' interest coverage shows initial improvement, followed by a peak, but subsequently declining trends, which could raise concerns about the company's ability to meet its interest payments in the future. This highlights the importance of monitoring the company's financial performance and debt management strategies.
Peer comparison
Dec 31, 2024