Merit Medical Systems Inc (MMSI)
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 | 155,693 | 127,600 | 88,968 | 59,178 | -3,237 |
| Interest expense | US$ in thousands | 31,219 | 15,511 | 6,339 | 5,261 | 9,994 |
| Interest coverage | 4.99 | 8.23 | 14.04 | 11.25 | -0.32 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $155,693K ÷ $31,219K
= 4.99
Merit Medical Systems Inc's interest coverage ratio has shown significant improvement over the years.
As of December 31, 2020, the interest coverage ratio was negative at -0.32, indicating that the company's earnings were insufficient to cover its interest expenses. However, this improved remarkably by December 31, 2021, reaching 11.25, signifying that the company's earnings were 11.25 times its interest expenses for that year.
The trend continued positively in subsequent years, with the interest coverage ratios for December 31, 2022, and December 31, 2023, reaching 14.04 and 8.23, respectively. This indicates that the company's ability to cover its interest expenses improved further during those periods.
However, there was a decline in the interest coverage ratio by December 31, 2024, dropping to 4.99. While still above 1, indicating that the company's earnings still covered its interest expenses, this suggests a slight decrease in the company's ability to cover its interest obligations compared to the previous years.
Overall, the upward trend in Merit Medical Systems Inc's interest coverage ratio from 2020 to 2023 reflects strengthening financial stability and a healthier financial position. The slight decline in 2024 may warrant further monitoring to ensure the company maintains a comfortable cushion to cover its interest expenses in the future.
Peer comparison
Dec 31, 2024