Cytokinetics Inc (CYTK)

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	-496,205	-495,817	-481,993	-370,818	-324,202	-218,876	-179,636	-223,559	-186,313	-201,016	-126,631	-104,192	-93,943	-81,242	-110,353	-104,711	-98,867	-100,460	-97,683	-97,592
Interest expense (ttm)	US$ in thousands	28,306	28,199	27,867	23,629	19,414	16,575	13,932	15,198	16,440	16,240	16,055	15,874	15,963	14,676	12,045	9,530	6,623	5,061	4,583	4,104
Interest coverage		-17.53	-17.58	-17.30	-15.69	-16.70	-13.21	-12.89	-14.71	-11.33	-12.38	-7.89	-6.56	-5.89	-5.54	-9.16	-10.99	-14.93	-19.85	-21.31	-23.78

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-496,205K ÷ $28,306K
= -17.53

Interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher ratio indicates better coverage and a lower financial risk.

The interest coverage ratio for Cytokinetics Inc has been consistently negative over the past eight quarters, indicating that the company's operating income is insufficient to cover its interest expenses. This trend raises concerns about the company's financial health and ability to meet its debt obligations.

The significant negative values suggest that the company is facing severe financial distress as its operating income is not enough to service its interest payments. Investors, creditors, and other stakeholders may view this as a warning sign of potential liquidity issues and increased default risk.

Cytokinetics Inc may need to take immediate steps to improve its operating performance, increase profitability, or restructure its debt to avoid further deterioration of its financial position.