ICU Medical Inc (ICUI)

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	40,529	24,428	-67,255	124,166	99,247
Interest expense	US$ in thousands	106,541	102,727	66,375	858	1,753
Interest coverage		0.38	0.24	-1.01	144.72	56.62

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $40,529K ÷ $106,541K
= 0.38

The interest coverage ratio measures a company's ability to pay interest expenses on its outstanding debt.

Analyzing ICU Medical Inc's interest coverage over the years, the data shows a strong interest coverage ratio in December 31, 2020, and December 31, 2021, with values of 56.62 and 144.72 respectively. This indicates that the company generated significantly more operating income to cover its interest payments during these periods.

However, in December 31, 2022, ICU Medical Inc's interest coverage ratio dropped to -1.01, signaling that the company's operating income was not sufficient to cover its interest expenses during that year. This is a concerning trend as it suggests potential financial strain and the need to closely monitor the company's debt management and profitability.

In the following years, December 31, 2023 and December 31, 2024, the interest coverage ratios improved slightly to 0.24 and 0.38 respectively. While these values are still below the ideal benchmark of 1.0, they indicate a slight recovery in ICU Medical Inc's ability to meet its interest obligations.

Overall, the fluctuating interest coverage ratios suggest that ICU Medical Inc experienced both strong and weak financial periods in terms of servicing its debt. It will be crucial for the company to focus on improving profitability and managing its debt levels to ensure sustainable financial health in the future.