Lantheus Holdings Inc (LNTH)

Interest coverage

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	450,646	430,962	33,904	-67,286	-2,000
Interest expense	US$ in thousands	19,669	20,019	7,185	7,752	9,479
Interest coverage		22.91	21.53	4.72	-8.68	-0.21

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $450,646K ÷ $19,669K
= 22.91

The interest coverage ratio is a key financial metric used to assess a company's ability to meet its interest obligations on outstanding debt. A higher interest coverage ratio indicates better financial health and lower risk of default.

Based on the data provided for Lantheus Holdings Inc, the interest coverage ratio has exhibited significant fluctuations over the years.

As of December 31, 2020, the interest coverage ratio was -0.21, indicating that the company's operating income was insufficient to cover its interest expenses, raising concerns about its ability to meet debt obligations.

By December 31, 2021, the interest coverage ratio had deteriorated further to -8.68, signaling a worsening financial position with significantly inadequate earnings to service its debt.

However, there was a notable improvement in the interest coverage ratio by December 31, 2022, reaching 4.72. This suggests that the company's operating income had increased sufficiently to cover its interest payments, though the ratio is still relatively low, indicating a moderate level of risk.

The following years, December 31, 2023, and December 31, 2024, demonstrated significant improvements in the interest coverage ratio to 21.53 and 22.91, respectively. These higher ratios indicate a robust financial position with ample earnings to comfortably meet interest obligations and lower risk of default.

In conclusion, Lantheus Holdings Inc's interest coverage ratio has experienced fluctuations but has shown a strong recovery in recent years, reaching healthy levels by the end of the period, which reflects improved financial viability and a reduced risk of default.