Roivant Sciences Ltd (ROIV)
Interest coverage
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 4,405,928 | 4,324,659 | -1,184,718 | -1,174,485 | -1,218,531 | -1,253,115 | -1,158,035 | -1,083,473 | -837,852 |
| Interest expense (ttm) | US$ in thousands | 34,778 | 36,178 | 35,180 | 34,268 | 27,968 | 20,868 | 13,923 | 7,140 | 7,041 |
| Interest coverage | 126.69 | 119.54 | -33.68 | -34.27 | -43.57 | -60.05 | -83.17 | -151.75 | -119.00 |
March 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $4,405,928K ÷ $34,778K
= 126.69
The interest coverage ratio indicates the company's ability to meet its interest expenses with its earnings before interest and taxes (EBIT). A higher interest coverage ratio is generally favorable as it suggests that the company has sufficient earnings to cover its interest payments.
Based on the data provided, Roivant Sciences Ltd's interest coverage ratio has shown significant fluctuations over the past few quarters. In the most recent period ending March 31, 2024, the interest coverage ratio stood at a healthy 126.69, indicating a strong ability to cover interest expenses. This is an improvement compared to the previous quarter, where the ratio was 119.54.
However, in the prior periods, particularly in September 2023, June 2023, and March 2023, the interest coverage ratio was negative, implying that the company's EBIT was insufficient to cover its interest payments during those periods. This could be a cause for concern as a negative interest coverage ratio indicates financial distress and an inability to meet interest obligations.
It is worth noting that the company has made significant improvements in its interest coverage ratio since the negative ratios in the past, showing a positive trend towards better financial health. Overall, while the recent interest coverage ratio indicates a strong ability to cover interest expenses, investors and stakeholders should remain cautious and monitor the company's future performance to ensure sustained financial stability.
Peer comparison
Mar 31, 2024