Illumina Inc (ILMN)

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	-833,000	-1,040,000	-4,179,000	945,000	905,000
Interest expense	US$ in thousands	—	77,000	26,000	61,000	49,000
Interest coverage		—	-13.51	-160.73	15.49	18.47

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $-833,000K ÷ $—K
= —

Interest coverage ratio indicates the company's ability to meet its interest obligations with its operating income. A higher ratio is generally preferable as it suggests better financial health and lower risk of default.

Based on the data provided, Illumina Inc's interest coverage ratio has exhibited fluctuations over the years. As of December 31, 2020, the interest coverage was 18.47, indicating the company's strong capability to cover its interest payments with operating income.

However, by December 31, 2021, the interest coverage ratio decreased to 15.49, which is still considered healthy but slightly lower compared to the previous year.

The financial performance took a sharp negative turn by December 31, 2022, with an interest coverage ratio of -160.73. A negative ratio suggests that the company's operating income is insufficient to cover its interest expenses, raising concerns about its financial stability.

The situation improved slightly by December 31, 2023, but the interest coverage ratio remained negative at -13.51, indicating ongoing challenges in meeting interest obligations.

Unfortunately, the data for December 31, 2024, is not available, making it uncertain how Illumina Inc's interest coverage has evolved beyond the provided information.

Overall, the trend in Illumina Inc's interest coverage ratio shows a mix of strong performance, followed by a significant decline and potential financial distress. It is crucial for investors and stakeholders to monitor this ratio closely to assess the company's ability to manage its debt and interest payments effectively.