Perrigo Company PLC (PRGO)

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	294,500	172,800	573,700	932,400	604,500
Interest expense	US$ in thousands	173,800	156,000	125,000	125,000	121,700
Interest coverage		1.69	1.11	4.59	7.46	4.97

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $294,500K ÷ $173,800K
= 1.69

Perrigo Company plc's interest coverage ratio has fluctuated over the past five years, ranging from a low of 0.78 in 2022 to a high of 4.80 in 2021. A ratio below 1 indicates the company may have difficulties meeting its interest obligations with its earnings, which was the case in 2022. However, the ratio improved significantly in 2023 to 1.63, suggesting a better ability to cover interest expenses with operating income. Overall, the company's interest coverage has shown some volatility but has generally stayed above 1 in recent years, indicating a moderate ability to handle its interest payments.