Merit Medical Systems Inc (MMSI)

Interest coverage

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	162,165	162,045	159,847	142,483	127,600	123,470	107,840	101,307	88,969	77,941	73,918	60,120	59,178	53,075	37,678	9,842	-3,237	-23,264	-25,552	6,147
Interest expense (ttm)	US$ in thousands	12,424	9,408	12,772	21,546	15,511	12,693	9,683	7,349	6,340	5,286	4,688	4,726	5,261	6,094	7,058	8,387	9,994	11,174	12,392	12,792
Interest coverage		13.05	17.22	12.52	6.61	8.23	9.73	11.14	13.79	14.03	14.74	15.77	12.72	11.25	8.71	5.34	1.17	-0.32	-2.08	-2.06	0.48

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $162,165K ÷ $12,424K
= 13.05

Merit Medical Systems Inc's interest coverage ratio has exhibited considerable fluctuations over the reporting periods provided. The interest coverage ratio is a measure of a company’s ability to meet its interest payments on outstanding debt, with higher values indicating a stronger ability to cover interest expenses.

From March 31, 2020, to December 31, 2022, the interest coverage ratio was consistently negative, indicating that Merit Medical Systems Inc's earnings were insufficient to cover its interest expenses during those periods. This situation could raise concerns about the company's financial health and ability to service its debt obligations.

However, from March 31, 2023, onwards, the interest coverage ratio turned positive and showed an increasing trend, reaching a peak of 17.22 as of September 30, 2024. This improvement reflects a better ability to pay interest expenses using operating income and suggests a strengthening financial position for the company.

Despite the positive trend in more recent periods, it is important for stakeholders to monitor Merit Medical Systems Inc's interest coverage ratio closely to ensure that it remains at a sustainable level and supports the company's long-term financial stability. fluctuations in the interest coverage ratio could indicate changes in the company's profitability and debt servicing capabilities.