LivaNova PLC (LIVN)

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	-22,477	-26,945	-74,469	-308,942	-172,922
Interest expense	US$ in thousands	58,853	48,250	50,151	40,837	15,091
Interest coverage		-0.38	-0.56	-1.48	-7.57	-11.46

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $-22,477K ÷ $58,853K
= -0.38

The interest coverage ratio of LivaNova PLC has been fluctuating over the past five years. In 2023, the interest coverage was 0.58, indicating that the company's operating income was only able to cover 58% of its interest expenses. This represents a decrease from the previous year where the interest coverage was 1.21, showing a worsening ability to cover interest expenses.

In 2021 and 2020, the interest coverage was negative (-0.02), meaning that the company's operating income was not sufficient to cover its interest expenses. This implies a significant financial strain on the company during those years.

In contrast, in 2019, the interest coverage was 3.36, indicating a healthier financial position where the operating income was more than sufficient to cover interest expenses.

Overall, the trend in LivaNova PLC's interest coverage ratio shows inconsistency and variability, with recent years demonstrating a concerning decline in the company's ability to cover its interest expenses with its operating income. This may raise red flags for investors and creditors regarding the company's financial health and ability to meet its debt obligations.