Inari Medical Inc (NARI)

Interest coverage

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	4,442	-25,891	10,980	14,924
Interest expense	US$ in thousands	196	294	295	1,135
Interest coverage		22.66	-88.06	37.22	13.15

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $4,442K ÷ $196K
= 22.66

Interest coverage ratio is a financial metric that indicates a company's ability to pay its interest expenses on outstanding debt. A higher interest coverage ratio signifies a stronger ability to meet interest payment obligations.

Inari Medical Inc's interest coverage ratio was not provided for the years ending December 31, 2023 and 2022. However, in the prior two years, the interest coverage ratios were 76.91 in 2021 and 28.29 in 2020.

The significant increase in interest coverage from 2020 to 2021 reflects an improvement in the company's ability to cover its interest expenses with its operating income. This suggests that in 2021, Inari Medical had a more comfortable margin of safety in meeting its interest obligations compared to 2020.

While the absence of data for 2022 and 2023 limits a complete analysis, the positive trend observed from 2020 to 2021 is a favorable signal of the company's financial health. It indicates that Inari Medical Inc possibly experienced enhanced profitability or better cost management, resulting in a stronger ability to service its debt.