Halozyme Therapeutics Inc (HALO)

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	575,227	367,091	265,865	275,902	144,255
Interest expense	US$ in thousands	18,095	18,762	16,947	7,526	20,378
Interest coverage		31.79	19.57	15.69	36.66	7.08

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $575,227K ÷ $18,095K
= 31.79

Interest coverage ratio measures a company's ability to pay its interest expenses on outstanding debt. A higher interest coverage ratio indicates that the company is more capable of meeting its interest payments.

For Halozyme Therapeutics Inc, the interest coverage ratio has shown a fluctuating trend over the years. In 2020, the ratio was 7.08, indicating that the company's operating income was able to cover its interest expenses approximately seven times. However, there was a significant improvement in 2021, with the ratio jumping to 36.66, suggesting a much stronger ability to cover interest costs.

In the following years, although the interest coverage ratio decreased from the peak in 2021, it remained at healthy levels. In 2022, the ratio was 15.69, and in 2023 it slightly increased to 19.57. By the end of 2024, the interest coverage ratio stood at 31.79, indicating that the company's earnings were still sufficient to cover its interest obligations comfortably.

Overall, the trend in Halozyme Therapeutics Inc's interest coverage ratio reflects a positive financial position, with the ability to comfortably meet its interest payments in most of the years analyzed. An upward trend in the interest coverage ratio is generally considered favorable by investors and creditors as it signifies lower financial risk and greater financial stability.