Revvity Inc. (RVTY)

Interest coverage

		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	Jul 5, 2020	Apr 5, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	801,582	861,889	932,684	1,109,269	758,645	921,073	995,811	1,087,497	1,335,883	1,512,657	1,559,784	1,393,377	947,111	550,112	383,686	296,304	300,574	316,535	333,012	331,541
Interest expense (ttm)	US$ in thousands	98,813	96,739	97,184	98,305	103,955	109,168	126,768	116,390	102,128	86,811	55,337	50,173	49,712	51,729	55,821	61,442	63,627	65,437	65,972	65,176
Interest coverage		8.11	8.91	9.60	11.28	7.30	8.44	7.86	9.34	13.08	17.42	28.19	27.77	19.05	10.63	6.87	4.82	4.72	4.84	5.05	5.09

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $801,582K ÷ $98,813K
= 8.11

Interest coverage is a key financial ratio that indicates a company's ability to pay its interest expenses on outstanding debt. It is calculated by dividing earnings before interest and taxes (EBIT) by the interest expense incurred during a specific period. A higher interest coverage ratio suggests that the company is more capable of meeting its interest payment obligations.

In the case of Revvity Inc., the interest coverage ratio has fluctuated over the past eight quarters. In Q4 2023, the interest coverage ratio significantly improved to 11.26 from the previous quarter's 7.77. This implies that the company's EBIT was 11.26 times larger than its interest expense in the most recent quarter, indicating a strong ability to cover interest payments.

Although there was some variability in the ratio over the quarters, with values ranging from 5.66 to 11.26, the overall trend appears relatively stable with occasional fluctuations. The company maintains a generally healthy interest coverage ratio, averaging around 8-9 over the period analyzed. This indicates that Revvity Inc. has consistently generated sufficient operating income to cover its interest costs, reflecting a lower risk of default on its debt obligations.

However, it is essential for investors and stakeholders to monitor any significant changes in the interest coverage ratio, as a declining ratio can signal potential financial distress and an increased risk of default. It is also important to compare Revvity Inc.'s interest coverage ratio with industry benchmarks and peer companies to gain a better perspective on its financial health and debt-servicing capacity.