Perrigo Company PLC (PRGO)

Interest coverage

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 Dec 31, 2019
Earnings before interest and tax (EBIT) (ttm) US$ in thousands 27,100 39,800 221,278 310,278 339,578 302,678 84,500 57,700 83,200 451,300 711,800 740,800 1,261,900 848,000 742,900 835,500 529,800 603,600 628,900 604,300
Interest expense (ttm) US$ in thousands 187,400 173,300 173,200 173,900 172,100 169,600 163,900 156,000 145,600 135,500 128,800 125,000 121,900 125,000 126,800 125,000 128,900 125,400 123,200 121,600
Interest coverage 0.14 0.23 1.28 1.78 1.97 1.78 0.52 0.37 0.57 3.33 5.53 5.93 10.35 6.78 5.86 6.68 4.11 4.81 5.10 4.97

September 30, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $27,100K ÷ $187,400K
= 0.14

The interest coverage ratio for Perrigo Company PLC has fluctuated over the periods provided. The ratio measures the company's ability to cover its interest expenses with its operating income.

The interest coverage ratio was relatively low in recent quarters, indicating that the company's operating income may not have been sufficient to cover its interest expenses. For example, in the most recent quarter ending September 30, 2024, the interest coverage was 0.96, suggesting that the company's operating income was just enough to cover its interest payments.

However, looking back over the historical data, there have been periods of stronger interest coverage, such as in the quarters ending December 31, 2021, and March 31, 2022, where the ratios were 10.35 and 5.93, respectively. This indicates that during those periods, Perrigo had ample operating income to comfortably cover its interest expenses multiple times over.

Overall, it would be important for Perrigo Company PLC to monitor its interest coverage ratio closely to ensure that it maintains a healthy balance between operating income and interest expenses to meet its financial obligations and ensure financial stability.