RadNet Inc (RDNT)

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 104,621 98,697 46,363 82,554 35,684
Interest expense US$ in thousands 79,849 64,483 50,841 48,876 46,092
Interest coverage 1.31 1.53 0.91 1.69 0.77

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $104,621K ÷ $79,849K
= 1.31

The interest coverage ratio measures a company's ability to meet its interest obligations with its operating income. A higher ratio indicates a greater ability to cover interest costs.

Analyzing RadNet Inc's interest coverage over the past five years, we observe fluctuations in the ratio. In December 31, 2020, the interest coverage was at a concerning 0.77, indicating that RadNet's operating income barely covered its interest expenses. However, over the following years, there has been an improvement in the company's ability to cover its interest payments. By December 31, 2021, the interest coverage ratio increased to 1.69, showing a healthier position.

Subsequently, RadNet's interest coverage dipped slightly to 0.91 by December 31, 2022, before recovering to 1.53 by December 31, 2023. However, it decreased to 1.31 by December 31, 2024, though still better than the ratio in 2020.

Overall, while RadNet Inc has shown improvement in its ability to cover interest costs since 2020, the ratio still exhibits some volatility. It would be prudent for stakeholders to monitor this trend to ensure the company's financial health and stability in meeting its debt obligations.