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 | 165,500 | 168,600 | 603,400 | 277,100 | 604,500 |
| Interest expense | US$ in thousands | 173,800 | 156,000 | 125,000 | 125,000 | 121,700 |
| Interest coverage | 0.95 | 1.08 | 4.83 | 2.22 | 4.97 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $165,500K ÷ $173,800K
= 0.95
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.
Peer comparison
Dec 31, 2023