Innovex International, Inc (INVX)

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	145,242	99,462	76,963	15,850	-61,428
Interest expense	US$ in thousands	2,430	5,506	4,034	2,155	621
Interest coverage		59.77	18.06	19.08	7.35	-98.92

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $145,242K ÷ $2,430K
= 59.77

The interest coverage ratios of Innovex International, Inc. over the specified period reveal notable fluctuations indicative of its evolving financial health. As of December 31, 2020, the company experienced a significant negative interest coverage of -98.92, suggesting that its earnings before interest and taxes (EBIT) were substantially insufficient to cover interest obligations, potentially reflecting operating losses or extraordinary circumstances that severely impacted earnings.

By December 31, 2021, the interest coverage ratio improved markedly to 7.35, indicating a transition to positive earnings and an ability to comfortably cover interest expenses for that year. This substantial rebound may be attributed to improved operating performance, cost management, or one-time gains. The trend continued upward with a ratio of 19.08 at December 31, 2022, further strengthening the company's capacity to service its interest obligations with a sizable margin.

In the subsequent year, December 31, 2023, the interest coverage remained strong at 18.06, consistent with sustained profitability and operational efficiencies. Finally, the ratio for December 31, 2024, surged to an impressive 59.77, reflecting a significant increase in earnings relative to interest expenses and suggesting a very low risk of default on interest payments.

Overall, the progression of Innovex International, Inc.’s interest coverage from a negative figure in 2020 to a robust multiple in 2024 demonstrates a substantial improvement in profitability and financial stability. The substantial increase in 2024 indicates enhanced earnings capacity, positioning the company favorably concerning its debt servicing ability.