Quidel Corporation (QDEL)

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	-1,943,200	703,332	809,900	901,059	1,041,580
Interest expense	US$ in thousands	188,300	117,500	75,700	5,706	9,623
Interest coverage		-10.32	5.99	10.70	157.91	108.24

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $-1,943,200K ÷ $188,300K
= -10.32

The interest coverage ratio for Quidel Corporation has shown significant fluctuations over the years. In 2020 and 2021, the company had very strong interest coverage, with ratios of 108.24 and 157.91 respectively, indicating that Quidel was comfortably able to meet its interest obligations. However, there was a sharp decline in this ratio in 2022 to 10.70, and a further decrease in 2023 to 5.99, raising concerns about the company's ability to cover its interest expenses from its operating income.

Moreover, the interest coverage ratio fell into negative territory in 2024, registering at -10.32. A negative interest coverage ratio implies that the company's operating income is insufficient to cover its interest payments, which could signal financial distress and potential default risk.

Overall, the declining trend in Quidel Corporation's interest coverage ratios from 2021 to 2024 raises red flags regarding the company's financial health and ability to service its debt. It would be crucial for stakeholders to closely monitor and address the deteriorating interest coverage situation to avoid potential financial difficulties in the future.