Neurocrine Biosciences Inc (NBIX)

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	336,700	221,000	127,200	139,500	78,500
Interest expense	US$ in thousands	4,600	7,100	25,800	32,800	32,000
Interest coverage		73.20	31.13	4.93	4.25	2.45

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $336,700K ÷ $4,600K
= 73.20

Neurocrine Biosciences, Inc.'s interest coverage ratio has shown a significant improvement over the years, indicating the company's enhanced ability to meet its interest obligations from its operating profits. The interest coverage ratio has steadily increased from 7.09 in 2019 to 85.83 in 2023, reflecting the company's strong earnings relative to its interest expenses.

The substantial increase in the interest coverage ratio over the years signifies that Neurocrine Biosciences, Inc. has become more proficient in generating earnings to cover its interest payments. This enhanced financial health is indicative of the company's improved ability to manage its debt obligations and suggests a reduced risk of financial distress due to insufficient operating income to cover interest expenses.

Overall, the trend of increasing interest coverage ratio implies that Neurocrine Biosciences, Inc. has strengthened its financial position and is better positioned to meet its debt obligations through internally generated funds, which is a positive signal for investors and creditors.