Illumina Inc (ILMN)

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	-1,040,000	-1,050,000	-3,953,000	-4,514,000	-4,310,000	-4,051,000	49,000	903,000	945,000	1,160,000	952,000	905,000	906,000	871,000	926,000	1,114,000	1,182,000	1,144,000	1,121,000	1,009,000
Interest expense (ttm)	US$ in thousands	76,000	67,000	54,000	41,000	27,000	31,000	39,000	49,000	62,000	65,000	62,000	57,000	49,000	44,000	44,000	48,000	52,000	61,000	65,000	61,000
Interest coverage		-13.68	-15.67	-73.20	-110.10	-159.63	-130.68	1.26	18.43	15.24	17.85	15.35	15.88	18.49	19.80	21.05	23.21	22.73	18.75	17.25	16.54

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-1,040,000K ÷ $76,000K
= -13.68

Illumina Inc's interest coverage ratio has been fluctuating significantly over the past eight quarters. The interest coverage ratio measures a company's ability to meet its interest obligations from its operating income. A higher ratio indicates better ability to cover interest expenses.

Looking at the data provided:
- In Q4 2023, Illumina's interest coverage ratio was -11.68, indicating that the company's operating income was not sufficient to cover its interest expenses. This is a concerning sign as it suggests financial stress.
- In Q3 2023, the interest coverage ratio deteriorated further to -15.00, indicating a worsening financial position.
- Q2 2023 saw a significant improvement as the interest coverage ratio improved to 0.00, indicating that the company's operating income was just enough to cover its interest expenses.
- In Q1 2023, the interest coverage ratio improved notably to 8.83, showing a healthy ability to cover interest obligations.
- Q4 2022 had a relatively high interest coverage ratio of 23.60, indicating a strong ability to cover interest expenses.
- Q3 2022 and Q2 2022 also showed healthy interest coverage ratios of 18.59 and -7.61, respectively.
- However, in Q1 2022, the interest coverage ratio was significantly low at -2.69, indicating a struggle to cover interest expenses.

Overall, the trend in Illumina Inc's interest coverage ratio has been volatile, with some quarters showing strong ability to cover interest expenses while others indicate financial strain. It is essential for the company to closely monitor and manage its interest obligations to maintain financial stability and growth.