Illumina Inc (ILMN)

Interest coverage

Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Earnings before interest and tax (EBIT) US$ in thousands -1,040,000 -4,179,000 945,000 905,000 1,182,000
Interest expense US$ in thousands 77,000 26,000 61,000 49,000 52,000
Interest coverage -13.51 -160.73 15.49 18.47 22.73

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $-1,040,000K ÷ $77,000K
= -13.51

The interest coverage ratio provides insight into a company's ability to meet its interest obligations with its operating income. A higher interest coverage ratio indicates a greater ability to cover interest expenses.

Analyzing Illumina Inc's interest coverage over the past five years reveals fluctuations in its ability to cover interest expenses. In 2023, the interest coverage ratio was -11.68, indicating that the company's operating income was insufficient to cover its interest expenses, posing a potential financial risk. This significant decline from the prior year's ratio of 23.60 raises concerns about Illumina's financial health.

In contrast, the interest coverage ratio improved in 2022 to -2.02, although it remained negative, indicating ongoing challenges in meeting interest obligations. The substantial decrease in the ratio from 2021, where it stood at a robust 72.50, suggests a significant deterioration in the company's financial performance.

The absence of data for 2019 limits a comprehensive trend analysis. However, the sharp decline in the interest coverage ratio over the past two years highlights a concerning trend in Illumina's ability to cover interest expenses with its operating income.

Overall, the negative interest coverage ratios in recent years indicate that Illumina Inc may be struggling to generate sufficient operating income to meet its interest obligations, warranting further investigation into the company's financial strategy and operational efficiency.


Peer comparison

Dec 31, 2023


See also:

Illumina Inc Interest Coverage