Thermo Fisher Scientific Inc (TMO)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 6,859,000 | 8,393,000 | 10,028,000 | 7,794,000 | 4,594,000 |
| Interest expense | US$ in thousands | 1,375,000 | 726,000 | 536,000 | 553,000 | 676,000 |
| Interest coverage | 4.99 | 11.56 | 18.71 | 14.09 | 6.80 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $6,859,000K ÷ $1,375,000K
= 4.99
Thermo Fisher Scientific Inc.'s interest coverage ratio has exhibited a generally favorable trend over the past five years, reflecting the company's ability to comfortably meet its interest obligations. The ratio has consistently been well above 1, indicating that the company's earnings before interest and taxes (EBIT) are more than sufficient to cover its interest expenses.
The interest coverage ratio peaked at 20.73 in 2021, signalling a strong ability to service debt obligations. However, the ratio slightly declined in 2023 to 14.64, which may be worth examining further to assess any potential reasons behind this decrease.
Overall, the consistent levels above 1 suggest a solid financial position for Thermo Fisher Scientific Inc., with the capability to generate ample earnings relative to its interest expenses. Maintaining a healthy interest coverage ratio is crucial for demonstrating financial stability and creditworthiness to stakeholders and creditors.
Peer comparison
Dec 31, 2023