Cytokinetics Inc (CYTK)

Interest coverage

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	-505,425	-497,831	-472,599	-468,850	-468,576	-469,855	-480,972	-375,712	-337,799	-238,769	-186,603	-231,203	-191,389	-203,569	-124,008	-100,374	-89,692	-77,807	-105,898	-100,594
Interest expense (ttm)	US$ in thousands	86,512	80,982	72,680	61,748	57,668	56,873	58,644	55,087	51,156	43,753	35,102	32,236	29,709	30,512	32,833	35,693	38,676	37,271	34,500	31,137
Interest coverage		-5.84	-6.15	-6.50	-7.59	-8.13	-8.26	-8.20	-6.82	-6.60	-5.46	-5.32	-7.17	-6.44	-6.67	-3.78	-2.81	-2.32	-2.09	-3.07	-3.23

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-505,425K ÷ $86,512K
= -5.84

The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income.

Based on the data provided for Cytokinetics Inc, the interest coverage ratio has been consistently negative throughout the periods reported, indicating that the company's operating income was insufficient to cover its interest expenses.

The trend shows a slight improvement in the interest coverage ratio from March 31, 2020, to June 30, 2020, but this improvement was short-lived as the ratio deteriorated again in subsequent periods. The ratios remained negative and fluctuated over the years, with the lowest point recorded on March 31, 2024.

Having a negative interest coverage ratio for an extended period is a cause for concern as it suggests that the company may be at risk of defaulting on its debt obligations if the trend continues. Cytokinetics Inc would need to closely monitor and address its interest expenses relative to its operating income to improve its financial stability and sustainability in the long term.