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.