Incyte Corporation (INCY)

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	61,366	836,766	531,782	572,352	-230,044
Interest expense	US$ in thousands	2,280	2,551	2,666	1,908	2,174
Interest coverage		26.91	328.01	199.47	299.97	-105.82

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $61,366K ÷ $2,280K
= 26.91

Incyte Corporation's interest coverage ratio has shown significant fluctuations over the years. As of December 31, 2020, the interest coverage ratio was at a concerning level of -105.82, indicating that the company's operating income was insufficient to cover its interest expenses. However, by December 31, 2021, the interest coverage ratio improved dramatically to 299.97, suggesting a strong ability to meet interest obligations.

Throughout the following years, Incyte Corporation maintained relatively stable interest coverage ratios, with values of 199.47 as of December 31, 2022, and 328.01 as of December 31, 2023, reflecting a healthy financial position. However, there was a notable decline in the interest coverage ratio to 26.91 by December 31, 2024, which may raise concerns about the company's ability to comfortably cover its interest payments using its operating income.

Overall, Incyte Corporation's interest coverage ratio has displayed both strengths and weaknesses over the years, with periods of robust coverage followed by potential challenges in meeting interest obligations. It is important for stakeholders to closely monitor these ratios to assess the company's financial health and ability to manage its debt effectively.