Merit Medical Systems Inc (MMSI)

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	127,600	88,968	59,178	-3,237	14,606
Interest expense	US$ in thousands	15,511	6,339	5,261	9,994	12,413
Interest coverage		8.23	14.04	11.25	-0.32	1.18

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $127,600K ÷ $15,511K
= 8.23

The interest coverage ratio of Merit Medical Systems, Inc. has been fluctuating over the past five years. The company's ability to cover its interest expenses improved significantly from 2019 to 2022, with the ratio consistently above 4.89 during this period. This trend indicates that the company's earnings before interest and taxes (EBIT) were sufficient to cover its interest obligations, providing a buffer against potential financial strain.

In 2023, the interest coverage ratio decreased to 9.76 from the previous year's level of 17.13. While still at a relatively healthy level, this decline may suggest a slight weakening in Merit Medical Systems, Inc.'s ability to cover its interest expenses with operating income. It would be important for the company to closely monitor its profitability and manage its interest-bearing debt to ensure that it maintains a comfortable interest coverage ratio in the future.

Overall, the historical trend indicates that Merit Medical Systems, Inc. has generally maintained a solid interest coverage ratio, with some fluctuations in recent years. Continued monitoring and management of this ratio will be essential for the company to sustain its financial health and meet its debt obligations effectively.