DaVita HealthCare Partners Inc (DVA)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,602,780 | 1,339,060 | 1,797,370 | 1,694,640 | 1,643,320 |
| Interest expense | US$ in thousands | 394,853 | 364,700 | 296,312 | 315,297 | 461,893 |
| Interest coverage | 4.06 | 3.67 | 6.07 | 5.37 | 3.56 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,602,780K ÷ $394,853K
= 4.06
DaVita Inc's interest coverage ratio has shown some fluctuations over the past five years, ranging from 3.75 to 6.30. Generally, a higher interest coverage ratio is considered more favorable as it indicates the company's ability to meet its interest obligations comfortably.
In 2023, the interest coverage ratio improved to 4.09 compared to the previous year, indicating that DaVita Inc generated enough operating income to cover its interest expenses by approximately 4.09 times. This suggests that the company's financial health may have strengthened in the most recent year, potentially due to increased profitability or reduced interest costs.
It is noteworthy that the interest coverage ratio in 2021 was the highest among the five years, at 6.30, which may indicate a period of strong financial performance and a solid ability to service debt obligations.
On the other hand, the lowest interest coverage ratio of 3.75 in 2022 raises some concerns as it may suggest a lower ability to cover interest expenses with operating income. However, it is important to consider the overall trend and factors affecting this ratio over multiple years to gain a more comprehensive understanding of DaVita Inc's financial position and debt servicing capacity.
Peer comparison
Dec 31, 2023