Gilead Sciences Inc (GILD)
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 | 1,667,000 | 7,605,000 | 6,749,000 | 9,279,000 | 2,653,000 |
| Interest expense | US$ in thousands | 977,000 | 944,000 | 935,000 | 1,001,000 | 984,000 |
| Interest coverage | 1.71 | 8.06 | 7.22 | 9.27 | 2.70 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,667,000K ÷ $977,000K
= 1.71
Based on the provided data, the interest coverage ratio of Gilead Sciences Inc has shown fluctuations over the past five years. In December 31, 2020, the interest coverage ratio was 2.70, indicating that the company generated 2.70 times the amount of earnings needed to cover its interest expenses.
By December 31, 2021, the interest coverage ratio significantly improved to 9.27, demonstrating a healthier ability to cover interest costs. In the following years, although the ratio decreased slightly to 7.22 in December 31, 2022, and 8.06 in December 31, 2023, it remained at levels that suggest the company's earnings are sufficient to comfortably cover its interest obligations.
However, there was a notable decline in the interest coverage ratio to 1.71 by December 31, 2024. This decrease may raise concerns about Gilead Sciences Inc's ability to cover its interest expenses from its operating profits. It would be important for stakeholders to monitor this trend closely to ensure the company maintains a healthy interest coverage ratio going forward.
Peer comparison
Dec 31, 2024