Cytokinetics Inc (CYTK)

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	-503,014	-468,576	-337,799	-185,982	-88,614
Interest expense	US$ in thousands	86,512	57,668	51,156	29,332	38,676
Interest coverage		-5.81	-8.13	-6.60	-6.34	-2.29

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $-503,014K ÷ $86,512K
= -5.81

The interest coverage ratio measures a company's ability to meet its interest obligations with its earnings. A higher ratio indicates a better ability to cover interest expenses.

Based on the data provided for Cytokinetics Inc, the interest coverage ratios for the years ending December 31, 2020 to December 31, 2024 are all negative. This indicates that the company's operating income is insufficient to cover its interest expenses during these periods.

The trend shows a fluctuation in the interest coverage ratio but remains consistently negative, with the ratio deteriorating over time. This suggests that the company may be facing challenges in generating enough earnings to cover its interest payments, which could raise concerns about its financial stability and ability to meet its debt obligations.

Overall, the negative trend in Cytokinetics Inc's interest coverage ratio signals a potential risk for investors and creditors, highlighting the importance of closely monitoring the company's financial performance and debt management strategies.