Gilead Sciences Inc (GILD)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 1,668,000 | 1,157,000 | 2,514,000 | 2,042,000 | 7,803,000 | 8,156,000 | 8,266,000 | 8,194,000 | 6,750,000 | 5,489,000 | 6,516,000 | 6,844,000 | 9,279,000 | 10,363,000 | 7,736,000 | 2,931,000 | 2,654,000 | 2,717,000 | 405,000 | 5,795,000 |
| Interest expense (ttm) | US$ in thousands | 976,000 | 980,000 | 975,000 | 968,000 | 944,000 | 919,000 | 916,000 | 928,000 | 936,000 | 947,000 | 968,000 | 982,000 | 1,001,000 | 1,030,000 | 1,016,000 | 1,000,000 | 984,000 | 960,000 | 974,000 | 982,000 |
| Interest coverage | 1.71 | 1.18 | 2.58 | 2.11 | 8.27 | 8.87 | 9.02 | 8.83 | 7.21 | 5.80 | 6.73 | 6.97 | 9.27 | 10.06 | 7.61 | 2.93 | 2.70 | 2.83 | 0.42 | 5.90 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,668,000K ÷ $976,000K
= 1.71
The interest coverage ratio for Gilead Sciences Inc fluctuated over the period analyzed. The ratio was relatively healthy at the end of March 2020, standing at 5.90, indicating that the company was generating almost six times the operating income needed to cover its interest expenses. However, by the end of June 2020, the interest coverage ratio dropped significantly to 0.42, suggesting a potential inability to meet interest obligations with operating income alone.
Throughout the subsequent quarters of 2020 and the first half of 2021, the interest coverage ratio remained below 3, indicating a continued struggle to cover interest expenses adequately. The ratio began to improve in the second half of 2021, surpassing 7 by the end of June 2021 and continuously increasing to reach a peak of 10.06 by September 30, 2021, and 9.27 by December 31, 2021.
The interest coverage ratio fluctuated between 6 and 9 throughout most of 2022, indicating a reasonable ability to cover interest expenses. However, by the end of March 2024, the ratio dropped significantly to 2.11 and remained low in the subsequent quarters, signaling potential challenges in meeting interest payments with operating income.
Overall, while Gilead Sciences Inc experienced fluctuations in its interest coverage ratio over the period analyzed, it generally managed to maintain a satisfactory level of coverage, except for certain quarters where the ratio fell below optimal levels, possibly indicating increased financial risk.
Peer comparison
Dec 31, 2024