Charles River Laboratories (CRL)

Interest coverage

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	712,248	749,870	737,230	722,418	675,896	570,831	575,480	571,225	546,765	578,401	594,850	555,703	532,545	457,733	381,483	357,660	362,924	324,417	336,194	346,736
Interest expense (ttm)	US$ in thousands	136,710	137,945	115,578	84,237	59,291	36,058	41,138	53,625	73,910	95,511	97,923	101,085	86,433	77,648	64,479	65,962	60,882	53,261	64,760	62,568
Interest coverage		5.21	5.44	6.38	8.58	11.40	15.83	13.99	10.65	7.40	6.06	6.07	5.50	6.16	5.89	5.92	5.42	5.96	6.09	5.19	5.54

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $712,248K ÷ $136,710K
= 5.21

The interest coverage ratio of Charles River Laboratories has been gradually declining over the years, from a high of 15.83 in September 2022 to 5.21 in December 2023. This indicates that the company's ability to cover its interest payments with its operating income has weakened. A higher interest coverage ratio is generally preferred as it reflects a company's capacity to meet its interest obligations. The decreasing trend in Charles River Laboratories' interest coverage ratio may suggest a potential increase in financial risk, as the company may be becoming less capable of servicing its debt obligations. It is important for investors and stakeholders to monitor this trend closely to assess the company's financial health and debt management strategies.