Sarepta Therapeutics Inc (SRPT)
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 | 279,165 | -498,088 | -636,715 | -355,423 | -493,118 |
| Interest expense | US$ in thousands | 18,391 | 22,010 | 53,248 | 63,525 | 59,947 |
| Interest coverage | 15.18 | -22.63 | -11.96 | -5.60 | -8.23 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $279,165K ÷ $18,391K
= 15.18
Interest coverage ratio is a key financial metric used to evaluate a company's ability to meet its interest obligations on outstanding debt. A ratio below 1 indicates that the company is not generating enough operating income to cover its interest expenses.
In the case of Sarepta Therapeutics Inc, the interest coverage ratios for the past five years show a concerning trend. The ratios for December 31, 2020, and December 31, 2021, were both negative, indicating that the company's operating income was insufficient to cover its interest expenses during those years.
Although there was a slight improvement in the interest coverage ratio for December 31, 2022, it remained negative, suggesting ongoing financial difficulties in meeting interest obligations. The ratios for December 31, 2023, and December 31, 2024, showed a significant deterioration, with the ratio for December 31, 2024, turning positive, indicating that the company may have generated sufficient income to cover its interest expenses that year.
Overall, Sarepta Therapeutics Inc's interest coverage ratios raise concerns about its financial health and ability to service its debt obligations. Investors and creditors may view the company as having high financial risk due to its consistently low or negative interest coverage ratios.
Peer comparison
Dec 31, 2024