Pfizer Inc (PFE)

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	11,114,000	3,267,000	35,967,000	25,602,000	8,487,000
Interest expense	US$ in thousands	3,091,000	2,209,000	1,238,000	1,291,000	1,449,000
Interest coverage		3.60	1.48	29.05	19.83	5.86

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $11,114,000K ÷ $3,091,000K
= 3.60

Based on the data provided for Pfizer Inc's interest coverage ratio over the last five years, the trend shows variability. In December 2020, the interest coverage ratio was 5.86, indicating that Pfizer was generating sufficient operating income to cover its interest expenses.

However, there was a significant improvement in December 2021, where the interest coverage ratio increased to 19.83, suggesting a stronger ability to meet interest obligations. This positive trend continued into December 2022, with an even higher interest coverage ratio of 29.05, reflecting a further enhancement in Pfizer's capacity to cover its interest expenses comfortably.

In December 2023, there was a notable decline in the interest coverage ratio to 1.48, signaling a potential strain in meeting interest payments with operating income. This could raise concerns about Pfizer's financial health and the sustainability of its debt obligations.

Nevertheless, in December 2024, there was a slight recovery in the interest coverage ratio to 3.60, indicating some improvement in Pfizer's ability to cover its interest costs compared to the previous year.

Overall, fluctuations in the interest coverage ratio over the years suggest varying levels of financial stability and operational efficiency for Pfizer Inc, highlighting the importance of monitoring this ratio closely for assessing the company's debt repayment capacity.