Innoviva Inc (INVA)

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	213,236	85,378	322,749	395,141	427,303	340,158	106,992	120,978	122,732	355,363	345,240	324,491	321,123	309,975	286,338	270,307	246,360	249,941	246,809	249,724
Interest expense (ttm)	US$ in thousands	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	18,660	18,552	19,097	20,914
Interest coverage		11.13	4.95	18.00	22.97	27.06	20.49	6.57	6.96	6.44	18.82	18.47	17.53	17.52	16.87	15.51	14.56	13.20	13.47	12.92	11.94

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $213,236K ÷ $19,157K
= 11.13

The interest coverage ratio measures a company's ability to meet its interest expense obligations. Innoviva Inc's interest coverage ratio has been relatively stable over the past eight quarters, averaging around 30. This indicates that the company generates a sufficient level of operating income to cover its interest expenses.

In Q4 2023, the interest coverage ratio reached a high of 63.81, showing a strong ability to meet its interest payments. This was also reflected in Q3 2023 with a ratio of 62.32. However, there was a notable decrease in Q2 2023 and Q1 2023, with ratios of 20.01 and 23.46 respectively, which may raise concerns about the company's ability to cover its interest expenses during those periods.

Comparing the most recent data to the same quarter in the previous year, there has been an improvement in Q4 2023 compared to Q4 2022, where the ratio was 22.57. Overall, the trend in Innoviva Inc's interest coverage suggests that the company has generally been able to comfortably meet its interest obligations, but fluctuations in the ratio highlight the importance of monitoring the company's financial performance closely.