Innoviva Inc (INVA)

Interest coverage

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	59,597	65,081	142,961	187,171	183,228	88,161	289,145	282,130	260,741	372,529	178,768	294,076	386,986	409,634	353,562	335,832	303,164	291,909	305,282	256,820
Interest expense (ttm)	US$ in thousands	22,209	23,412	22,001	20,581	19,157	17,233	17,933	17,206	15,789	16,602	16,296	17,386	19,070	18,880	18,693	18,509	18,331	18,369	18,459	18,559
Interest coverage		2.68	2.78	6.50	9.09	9.56	5.12	16.12	16.40	16.51	22.44	10.97	16.91	20.29	21.70	18.91	18.14	16.54	15.89	16.54	13.84

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $59,597K ÷ $22,209K
= 2.68

Based on the provided data, Innoviva Inc's interest coverage ratio has shown some fluctuations over the years. The interest coverage ratio is a measure of a company's ability to pay its interest expenses on outstanding debt. A higher ratio indicates that the company is more capable of meeting its interest obligations.

Innoviva Inc's interest coverage ratio has generally been above 10, suggesting that the company has been able to cover its interest payments comfortably. The ratio increased from around 13.84 in March 2020 to a peak of 22.44 in September 2022, indicating an improvement in the company's ability to cover its interest expenses.

However, there was a significant decline in the interest coverage ratio in the subsequent quarters, dropping to as low as 2.68 in December 2024. This decline could be a cause for concern as it may indicate that the company's ability to cover its interest payments has weakened.

Overall, Innoviva Inc's interest coverage ratio has exhibited both increases and decreases over the period analyzed. It would be essential for stakeholders to monitor this ratio closely to ensure that the company can meet its financial obligations and sustain its operations effectively.