Incyte Corporation (INCY)

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	836,766	646,288	561,095	512,892	531,782	571,272	631,951	573,886	572,352	620,110	407,243	543,116	-230,039	-271,958	-120,431	-319,261	488,645	433,106	315,919	261,277
Interest expense (ttm)	US$ in thousands	2,551	2,414	2,432	2,455	2,666	2,751	2,549	2,229	1,908	1,584	1,689	1,931	2,174	2,353	2,406	2,122	1,855	1,603	1,411	1,493
Interest coverage		328.01	267.72	230.71	208.92	199.47	207.66	247.92	257.46	299.97	391.48	241.11	281.26	-105.81	-115.58	-50.05	-150.45	263.42	270.18	223.90	175.00

December 31, 2023 calculation

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

Incyte Corp.'s interest coverage ratio has been relatively stable over the past eight quarters, ranging from a low of 182.08 in Q2 2023 to a high of 296.34 in Q2 2022. The interest coverage ratio measures the company's ability to pay interest expenses on its outstanding debt, with a higher ratio indicating a greater ability to meet interest obligations from operating income.

The company's interest coverage ratio has generally been strong, consistently well above 1, which indicates that Incyte Corp. has generated sufficient earnings to cover its interest payments. The highest interest coverage ratio of 296.34 in Q2 2022 indicates that the company had nearly 300 times more operating income than needed to cover its interest expenses in that quarter.

Overall, Incyte Corp.'s interest coverage ratio reflects a solid financial position with strong profitability and the ability to comfortably meet its interest obligations.