Henry Schein Inc (HSIC)
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 | 649,000 | 623,000 | 752,000 | 857,000 | 540,000 |
| Interest expense | US$ in thousands | 131,000 | 87,000 | 35,000 | 28,000 | 41,000 |
| Interest coverage | 4.95 | 7.16 | 21.49 | 30.61 | 13.17 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $649,000K ÷ $131,000K
= 4.95
The interest coverage ratio for Henry Schein Inc has shown some fluctuations over the past five years. As of December 31, 2020, the interest coverage ratio was 13.17, indicating that the company generated operating income 13.17 times more than its interest expenses for the year.
By December 31, 2021, Henry Schein Inc's interest coverage ratio improved significantly to 30.61, suggesting a substantial increase in the company's ability to cover its interest payments with operating income. This improvement continued into December 31, 2022, with an interest coverage ratio of 21.49, still reflecting a strong ability to meet interest obligations through operating earnings.
However, there was a notable decrease in the interest coverage ratio by December 31, 2023, dropping to 7.16. This decline could potentially raise concerns about the company's ability to comfortably cover its interest expenses with operating income.
Furthermore, by December 31, 2024, the interest coverage ratio further decreased to 4.95, indicating a continued decline in the company's ability to cover interest payments with operating income. This trend suggests a potential strain on Henry Schein Inc's ability to meet its interest obligations from its earnings alone.
In conclusion, while Henry Schein Inc demonstrated strong interest coverage in some years, the decreasing trend in recent years raises questions about the company's ability to sustainably cover interest expenses solely through operating income.
Peer comparison
Dec 31, 2024