Enovis Corp (ENOV)
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 | -775,719 | -47,179 | 22,883 | -91,969 | -66,182 |
| Interest expense | US$ in thousands | 57,100 | 19,749 | 24,052 | 72,593 | 104,262 |
| Interest coverage | -13.59 | -2.39 | 0.95 | -1.27 | -0.63 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $-775,719K ÷ $57,100K
= -13.59
The interest coverage ratio measures a company's ability to pay interest expenses on its outstanding debt with its operating income. A ratio below 1 indicates that the company is not generating enough operating income to cover its interest expenses.
Based on the data provided for Enovis Corp:
- As of December 31, 2020, the interest coverage ratio was -0.63, indicating that the company's operating income was insufficient to cover its interest expenses.
- By December 31, 2021, the interest coverage ratio deteriorated further to -1.27, signaling a continued lack of ability to cover interest costs.
- On December 31, 2022, the interest coverage ratio improved to 0.95, suggesting that the company's operating income was nearly sufficient to cover its interest expenses, although it was still below the ideal threshold of 1.
- However, the ratio worsened significantly on December 31, 2023, with a value of -2.39, indicating a negative impact on the company's ability to pay interest from its operating income.
- By December 31, 2024, the interest coverage ratio plummeted to -13.59, implying a substantial decrease in the company's ability to cover its interest expenses, potentially raising solvency concerns.
In summary, Enovis Corp's interest coverage ratio has shown fluctuations over the years, with periods of insufficient operating income to cover interest costs. This trend raises concerns about the company's financial health and its ability to meet its debt obligations.
Peer comparison
Dec 31, 2024