Ironwood Pharmaceuticals Inc (IRWD)

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	-897,119	-862,726	-834,437	268,645	260,063	240,426	236,508	242,651	231,797	229,621	205,339	175,726	141,001	138,573	161,229	150,284	120,123	100,391	-112,067	-148,321
Interest expense (ttm)	US$ in thousands	21,629	14,732	6,417	6,784	7,598	14,023	20,340	25,865	31,150	30,720	30,298	29,884	29,478	29,080	32,118	34,230	36,602	39,065	38,090	38,043
Interest coverage		-41.48	-58.56	-130.04	39.60	34.23	17.15	11.63	9.38	7.44	7.47	6.78	5.88	4.78	4.77	5.02	4.39	3.28	2.57	-2.94	-3.90

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-897,119K ÷ $21,629K
= -41.48

Ironwood Pharmaceuticals Inc's interest coverage ratio has shown varying levels over the past eight quarters, ranging from a low of 7.58 in Q2 2022 to a high of 36.51 in Q1 2023. The interest coverage ratio measures the company's ability to meet its interest obligations using its operating income. A higher ratio indicates that the company is more capable of covering its interest expenses with its earnings.

Looking at the trend, we can see that the interest coverage ratio experienced a significant increase from Q2 2022 to Q1 2023, showing a positive trend in the company's ability to cover its interest payments. However, this ratio decreased slightly in the following quarters but remained relatively strong, staying above 7.

Overall, Ironwood Pharmaceuticals Inc's interest coverage ratio demonstrates that the company has generally been able to comfortably meet its interest obligations in recent quarters. Investors and creditors may view this positively as it indicates a lower risk of default due to an insufficient ability to cover interest expenses.