Edwards Lifesciences Corp (EW)

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	1,567,900	1,534,100	1,793,600	1,691,900	938,900
Interest expense	US$ in thousands	19,800	17,600	19,200	18,400	15,800
Interest coverage		79.19	87.16	93.42	91.95	59.42

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $1,567,900K ÷ $19,800K
= 79.19

Interest coverage ratio is a key financial metric that indicates a company's ability to meet its interest obligations on outstanding debt. It is calculated by dividing the earnings before interest and taxes (EBIT) by the interest expenses. A higher interest coverage ratio indicates that the company is more capable of servicing its debt.

For Edwards Lifesciences Corp, the interest coverage ratio has shown a consistent and strong trend over the past five years, increasing from 59.42 in December 2020 to 79.19 in December 2024. This signifies that the company's earnings before interest and taxes have been sufficient to cover its interest expenses by a significant margin.

The significant improvement in the interest coverage ratio reflects the company's ability to generate profits and manage its debt effectively. A ratio above 1 indicates that the company is generating enough operating income to cover its interest obligations, and higher values indicate a greater cushion for the company to handle fluctuations in earnings.

Overall, the increasing trend in Edwards Lifesciences Corp's interest coverage ratio is a positive signal for investors and creditors, demonstrating the company's financial strength and ability to meet its debt obligations comfortably.