DexCom Inc (DXCM)

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	730,700	409,400	275,600	315,600	164,500
Interest expense	US$ in thousands	20,300	18,600	18,800	17,700	60,300
Interest coverage		36.00	22.01	14.66	17.83	2.73

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $730,700K ÷ $20,300K
= 36.00

Interest coverage is a key financial ratio that provides insight into a company's ability to meet its interest obligations on its debt. Dexcom Inc's interest coverage has varied significantly over the past five years.

In 2023, Dexcom Inc's interest coverage ratio stood at an impressive 29.54, indicating that the company generated 29.54 times the income needed to cover its interest expenses for the year. This strong interest coverage ratio suggests that Dexcom Inc has ample earnings to comfortably meet its interest payments.

Comparing this to the previous years, we see a notable improvement from 2022 when the interest coverage was 21.04. Back in 2021, the interest coverage ratio was relatively lower at 2.77, demonstrating a relatively weaker ability to cover interest expenses. However, Dexcom Inc was able to increase its interest coverage significantly in 2022 and further improve upon it in 2023.

Looking back at 2020 and 2019, the interest coverage ratios were 3.54 and 2.29 respectively. These figures indicate a moderate ability to cover interest payments during those years.

Overall, Dexcom Inc's interest coverage has shown a positive trend over the past five years, with a substantial increase in 2023, reflecting the company's improved financial performance and ability to comfortably meet its interest obligations.