IQVIA Holdings Inc (IQV)

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	2,131,000	1,767,000	1,504,000	767,000	754,000
Interest expense	US$ in thousands	672,000	416,000	375,000	416,000	447,000
Interest coverage		3.17	4.25	4.01	1.84	1.69

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $2,131,000K ÷ $672,000K
= 3.17

Interest coverage measures a company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio indicates a greater ability to meet interest obligations.

In the case of IQVIA Holdings Inc, the interest coverage ratio has shown a fluctuating trend over the past five years.

In 2023, the interest coverage ratio was 3.24, lower than the previous year, indicating a slight decrease in the company's ability to cover its interest expenses with operating income. However, the ratio remains above 1, suggesting that the company's operating income is sufficient to cover its interest expenses.

In 2022, the interest coverage ratio improved to 4.50, reflecting a stronger ability to cover interest expenses compared to the prior year. This increase indicates enhanced financial health and reduced financial risk for the company.

In 2021, the interest coverage ratio was 3.85, showing a moderate decrease from the previous year. Despite the decline, the ratio remained at a level indicating the company's ability to meet its interest obligations comfortably.

In 2020 and 2019, the interest coverage ratios were 1.93 and 1.92, respectively, which were lower compared to the recent years. These lower ratios suggest a relatively weaker ability to cover interest expenses with operating income during those years.

Overall, although there have been fluctuations in IQVIA Holdings Inc's interest coverage ratio over the past five years, the company has generally maintained a level of financial stability with its operating income sufficiently covering its interest expenses.