DaVita HealthCare Partners Inc (DVA)
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 | 2,090,480 | 1,602,780 | 1,339,060 | 1,797,370 | 1,694,640 |
| Interest expense | US$ in thousands | 443,181 | 394,853 | 364,700 | 296,312 | 315,297 |
| Interest coverage | 4.72 | 4.06 | 3.67 | 6.07 | 5.37 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $2,090,480K ÷ $443,181K
= 4.72
DaVita HealthCare Partners Inc's interest coverage ratio has fluctuated over the years. The interest coverage ratio measures the company's ability to meet its interest payment obligations with its operating income.
In December 2020, the interest coverage ratio was 5.37, indicating DaVita's ability to cover its interest expenses 5.37 times over. This ratio improved to 6.07 by December 2021, suggesting stronger financial health and a better ability to meet interest payments.
However, by December 2022, the interest coverage ratio decreased to 3.67, signaling a decline in DaVita's ability to cover its interest expenses with its operating income. This could be a concern as a lower ratio indicates higher financial risk.
In the subsequent years, the interest coverage ratio slightly improved to 4.06 in December 2023 and 4.72 in December 2024, but it remained below the levels seen in 2020 and 2021.
Overall, DaVita's interest coverage ratio has shown some variation, with improvements and declines in different years. An interest coverage ratio below 1 indicates that the company is not generating enough operating income to cover its interest expenses, posing a higher risk of default.
Peer comparison
Dec 31, 2024