Roivant Sciences Ltd (ROIV)

Interest coverage

		Mar 31, 2025	Dec 31, 2024	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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	-408,338	4,699,602	4,383,386	4,290,840	4,159,234	-1,119,347	-1,115,518	-1,079,355	-1,046,103	-1,140,748	-1,074,384	-1,478,047	-1,350,125	-1,625,673	-1,638,720	-1,110,832	-1,070,898	-612,565
Interest expense (ttm)	US$ in thousands	26,798	33,973	43,417	39,265	34,778	36,178	35,180	34,268	27,968	22,815	52,844	520,858	590,543	618,369	582,077	227,582	267,716	236,468
Interest coverage		-15.24	138.33	100.96	109.28	119.59	-30.94	-31.71	-31.50	-37.40	-50.00	-20.33	-2.84	-2.29	-2.63	-2.82	-4.88	-4.00	-2.59

March 31, 2025 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-408,338K ÷ $26,798K
= -15.24

Roivant Sciences Ltd has shown a fluctuating trend in its interest coverage ratio over the examined period. From December 31, 2020, to September 30, 2022, the company had negative interest coverage ratios, indicating that its earnings before interest and taxes (EBIT) were not sufficient to cover its interest expenses. This situation may raise concerns about the company's ability to meet its debt obligations.

However, starting from March 31, 2024, the interest coverage ratio improved significantly, surpassing 100 in December 31, 2024. A ratio above 1 indicates that the company's EBIT is adequate to cover its interest expenses, demonstrating a healthier financial position. This improvement suggests that the company's profitability has increased, or its interest expenses have decreased, leading to a more stable financial condition.

It is essential for investors and creditors to monitor the interest coverage ratio of Roivant Sciences Ltd closely to assess its ability to manage debt and make timely interest payments. The recent positive trend is a promising sign, but a sustained improvement in the company's financial performance would be required to solidify its financial health in the long term.