Pacira BioSciences, Inc. (PCRX)
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 | -49,667 | 82,007 | 53,278 | 89,924 | 51,516 |
| Interest expense | US$ in thousands | 13,439 | 20,306 | 39,976 | 31,750 | 25,671 |
| Interest coverage | -3.70 | 4.04 | 1.33 | 2.83 | 2.01 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $-49,667K ÷ $13,439K
= -3.70
The interest coverage ratio is an important indicator of a company's ability to meet its interest obligations on its outstanding debt. In the case of Pacira BioSciences, Inc., the interest coverage ratios for the years 2020 to 2024 were as follows:
- December 31, 2020: 2.01
- December 31, 2021: 2.83
- December 31, 2022: 1.33
- December 31, 2023: 4.04
- December 31, 2024: -3.70
A higher interest coverage ratio indicates that the company is more capable of meeting its interest payments from its operating income. From 2020 to 2023, Pacira BioSciences showed an improvement in its interest coverage ratio, with the ratio peaking at 4.04 in 2023, indicating a strong ability to cover its interest expenses.
However, the interest coverage ratio dropped to -3.70 in 2024. A negative interest coverage ratio suggests that the company's operating income was not sufficient to cover its interest expenses, indicating a potential financial risk. It is crucial for the company to monitor and manage its debt levels and interest payments to avoid financial distress in the future.
Peer comparison
Dec 31, 2024