IDEXX Laboratories Inc (IDXX)

Interest coverage

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	1,102,757	1,080,586	1,049,229	932,158	899,830	872,428	853,388	933,308	932,463	918,199	864,020	797,961	694,755	625,510	593,435	564,487	553,201	552,916	530,558	512,022
Interest expense (ttm)	US$ in thousands	41,581	45,863	48,214	45,989	39,858	33,788	29,924	29,220	29,808	30,159	31,135	33,017	33,125	32,690	31,670	30,361	31,055	32,222	33,585	33,856
Interest coverage		26.52	23.56	21.76	20.27	22.58	25.82	28.52	31.94	31.28	30.45	27.75	24.17	20.97	19.13	18.74	18.59	17.81	17.16	15.80	15.12

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,102,757K ÷ $41,581K
= 26.52

The interest coverage ratio measures a company's ability to pay interest expenses on its outstanding debt. Idexx Laboratories, Inc. has shown consistent strong interest coverage ratios over the past eight quarters, ranging from a low of 20.85 to a high of 32.51. This indicates that the company generates more than enough earnings to cover its interest obligations comfortably.

The trend in Idexx Laboratories' interest coverage ratio shows a slight decrease over the past few quarters, with Q4 2023 reporting the lowest ratio at 30.52. Despite the slight decrease, all the ratios remain well above the industry average, reflecting the company's strong financial position and its ability to meet its interest payments.

Overall, the consistently high interest coverage ratios suggest that Idexx Laboratories, Inc. has a strong ability to service its debt obligations and indicates financial stability. However, ongoing monitoring of the trend and factors affecting the ratio is recommended to ensure continued financial health.