NeoGenomics Inc (NEO)
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 | -90,190 | -157,836 | -9,993 | -7,037 | 7,358 |
| Interest expense | US$ in thousands | 6,907 | 7,581 | 5,082 | 7,019 | 3,713 |
| Interest coverage | -13.06 | -20.82 | -1.97 | -1.00 | 1.98 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $-90,190K ÷ $6,907K
= -13.06
Neogenomics Inc.'s interest coverage ratio has exhibited significant fluctuations over the past five years. In 2019, the interest coverage ratio stood at a comfortable 3.50, indicating that the company's operating income was sufficient to cover its interest expenses. However, a notable decline was observed in 2020, with the interest coverage ratio plummeting to -1.99. This negative ratio suggests that Neogenomics Inc.'s operating income was insufficient to cover its interest expenses, implying potential financial distress.
The situation worsened in 2021, as the interest coverage ratio further decreased to -23.37, reflecting a substantial deterioration in the company's ability to make interest payments from its operating income. By 2022, the interest coverage ratio deteriorated even further, reaching -101.66. This signifies a severe financial strain for the company, with the operating income falling significantly short of meeting its interest obligations.
Overall, the trend in Neogenomics Inc.'s interest coverage ratio raises concerns about the company's financial health and its ability to service its debt obligations. Management may need to reassess its financial strategies and consider measures to improve profitability and operational efficiency to enhance its ability to meet interest payments in the future.