Incyte Corporation (INCY)

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	836,766	531,782	572,352	-230,044	488,646
Interest expense	US$ in thousands	2,551	2,666	1,908	2,174	1,855
Interest coverage		328.01	199.47	299.97	-105.82	263.42

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $836,766K ÷ $2,551K
= 328.01

The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt obligations. A higher interest coverage ratio indicates a stronger ability to cover interest expenses.

Incyte Corp.'s interest coverage ratio has been fluctuating over the past five years, as shown in the table. The trend shows that the company has generally maintained a healthy interest coverage ratio, indicating a consistent ability to cover its interest payments.

Dec 31, 2023: Incyte Corp. demonstrated a robust interest coverage ratio of 255.50, indicating a strong ability to cover its interest expenses over the year.
Dec 31, 2022: The interest coverage ratio slightly decreased to 224.89, but still remained at a level suggesting the company can comfortably meet its interest obligations.
Dec 31, 2021: The interest coverage ratio significantly improved to 334.14, reflecting an even stronger capacity to cover interest expenses.
Dec 31, 2020: A negative interest coverage ratio of -90.84 occurred, indicating that Incyte Corp. faced challenges in meeting its interest payments from its operating income during that year.
Dec 31, 2019: The interest coverage ratio rebounded to a healthy level of 227.33, showing an improved ability to cover interest expenses compared to the previous year.

Overall, Incyte Corp. has demonstrated a generally healthy interest coverage position over the years, with fluctuations reflecting changes in the company's financial performance. Investors and creditors may view the company favorably for its ability to manage its interest obligations effectively.