Penumbra Inc (PEN)

Interest coverage

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	19,361	4,064	-5,210	90,209	79,541	54,995	29,589	11,561	6,082	-39,705	-36,358	-25,907	-8,398	30,811	2,299	-25,662	-38,515	-26,191	6,516	36,966
Interest expense (ttm)	US$ in thousands	1,017	3,809	4,596	5,091	5,645	2,815	1,735	968	461	183	278	505	938	1,364	1,639	1,448	1,267	820	1,166	1,842
Interest coverage		19.04	1.07	-1.13	17.72	14.09	19.54	17.05	11.94	13.19	-216.97	-130.78	-51.30	-8.95	22.59	1.40	-17.72	-30.40	-31.94	5.59	20.07

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $19,361K ÷ $1,017K
= 19.04

Penumbra Inc's interest coverage ratio has fluctuated significantly over the reporting periods provided. An interest coverage ratio above 1 indicates the company can comfortably cover its interest expenses with its operating income. A ratio below 1 suggests the company may have difficulty meeting its interest obligations.

From March 31, 2020, to June 30, 2021, Penumbra Inc maintained a healthy interest coverage ratio above 1, indicating a strong ability to cover interest expenses. However, the ratio sharply declined in the subsequent periods, reaching negative values, indicating that the company's operating income was insufficient to meet its interest expenses.

The negative interest coverage ratios from September 30, 2020, to June 30, 2024, imply that Penumbra Inc was not generating enough operating income to cover its interest costs during those periods. This can raise concerns about the company's financial stability and its ability to service debt obligations.

However, the interest coverage ratio improved significantly in the last few reporting periods, reaching positive values again from December 31, 2022, to December 31, 2024. This improvement suggests that Penumbra Inc's operating income was sufficient to cover its interest expenses during those periods, indicating a positive trend in the company's financial health.

Overall, while Penumbra Inc faced challenges with its interest coverage ratio in the mid-reporting periods, the recent improvements indicate a potentially stronger financial position. It is essential for investors and stakeholders to monitor the company's interest coverage ratio closely to assess its ability to meet interest obligations and manage debt effectively.