Option Care Health Inc (OPCH)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 332,628 | 420,964 | 260,664 | 171,958 | 85,948 |
| Interest expense | US$ in thousands | 49,029 | 51,248 | 53,806 | 67,003 | 107,770 |
| Interest coverage | 6.78 | 8.21 | 4.84 | 2.57 | 0.80 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $332,628K ÷ $49,029K
= 6.78
Option Care Health Inc's interest coverage has shown a positive trend over the years, indicating an improving ability to cover interest expenses from its operating income. The interest coverage ratio was relatively low at 0.80 as of December 31, 2020, suggesting a potential risk of insufficient earnings to cover interest payments. However, there has been a steady improvement in the company's ability to cover interest expenses, with the ratio increasing to 2.57 as of December 31, 2021, and further improving to 4.84 as of December 31, 2022.
By December 31, 2023, the interest coverage ratio significantly improved to 8.21, reflecting a strong increase in the company's ability to meet interest obligations comfortably. However, there was a slight decrease in the ratio to 6.78 by December 31, 2024, which could indicate either a decrease in operating income or an increase in interest expenses.
Overall, Option Care Health Inc's interest coverage ratio has generally improved over the years, with the company demonstrating a better ability to service its interest payments, except for a slight dip in 2024. Investors and creditors may view this trend positively as it signifies a healthier financial position and reduced default risk related to interest obligations.
Peer comparison
Dec 31, 2024