Jazz Pharmaceuticals PLC (JAZZ)
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 | 578,580 | -65,528 | 170,278 | 378,073 | 532,374 |
| Interest expense | US$ in thousands | 33,177 | 33,229 | 90,195 | 76,100 | 59,100 |
| Interest coverage | 17.44 | -1.97 | 1.89 | 4.97 | 9.01 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $578,580K ÷ $33,177K
= 17.44
The interest coverage ratio for Jazz Pharmaceuticals plc has fluctuated over the past five years. In 2019 and 2020, the company had a strong interest coverage ratio of 8.83 and 7.65 respectively, indicating that it was comfortably able to cover its interest expenses with its operating income. However, there was a significant drop in 2021 to 0.61, suggesting potential difficulties in meeting interest obligations with operating income alone.
The trend improved slightly in 2022 with an interest coverage ratio of 1.74 but still remained at a lower level. The most recent data for 2023 shows a further improvement to 2.05, indicating a stronger ability to cover interest expenses compared to the previous year.
It is important for investors and creditors to monitor this ratio closely as it provides insights into the company's ability to handle its debt obligations. The recent improvements in Jazz Pharmaceuticals' interest coverage ratio may reflect a positive trend in its financial performance, but further monitoring is advisable to assess the company's ability to consistently cover its interest expenses in the long term.
Peer comparison
Dec 31, 2023