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.
Peer comparison
Dec 31, 2023