Perrigo Company PLC (PRGO)

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	107,100	165,500	168,600	603,400	277,100
Interest expense	US$ in thousands	187,800	173,800	156,000	125,000	125,000
Interest coverage		0.57	0.95	1.08	4.83	2.22

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $107,100K ÷ $187,800K
= 0.57

The interest coverage ratio is a measure of a company's ability to meet its interest obligations with its operating income. A higher interest coverage ratio indicates a stronger ability to meet interest payments.

Looking at Perrigo Company PLC's interest coverage over the years, we see a fluctuating trend:

- As of December 31, 2020, the interest coverage ratio was 2.22, indicating that the company's operating income was able to cover its interest expenses 2.22 times.
- By December 31, 2021, the interest coverage ratio improved to 4.83, showing a stronger ability to cover interest payments.
- However, there was a notable decline by December 31, 2022, with the interest coverage ratio dropping to 1.08, suggesting a potential strain in meeting interest obligations.
- This trend continued into December 31, 2023, where the interest coverage ratio fell further to 0.95, indicating a potential liquidity risk.
- Finally, as of December 31, 2024, the interest coverage ratio decreased significantly to 0.57, which may signal challenges in meeting interest payments from operating income.

Overall, the trend in Perrigo Company PLC's interest coverage ratio demonstrates fluctuations, with a decline in recent years, potentially indicating a need for closer monitoring of the company's ability to cover its interest expenses.