Tandem Diabetes Care Inc (TNDM)
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 | -99,285 | -210,372 | -86,644 | 22,653 | -7,957 |
| Interest expense | US$ in thousands | 5,509 | 9,882 | 4,313 | 4,313 | 12,153 |
| Interest coverage | -18.02 | -21.29 | -20.09 | 5.25 | -0.65 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $-99,285K ÷ $5,509K
= -18.02
The interest coverage ratio for Tandem Diabetes Care Inc has exhibited significant fluctuations over the years. At the end of December 31, 2020, the interest coverage ratio stood at a concerning -0.65, indicating that the company's operating income was insufficient to cover its interest expenses, raising solvency concerns.
However, there was a notable improvement by December 31, 2021, as the interest coverage ratio increased to 5.25. This suggests that the company's operating income was more than sufficient to cover its interest obligations, indicating a stronger financial position.
Unfortunately, the trend reversed in the subsequent years, with the interest coverage ratios plummeting to -20.09 at the end of December 31, 2022, -21.29 at the end of December 31, 2023, and -18.02 at the end of December 31, 2024. These negative ratios indicate that the company's operating income fell significantly short of covering its interest expenses, posing a serious risk to its financial stability.
Overall, the fluctuating nature of Tandem Diabetes Care Inc's interest coverage ratio underscores the importance of closely monitoring the company's ability to meet its interest obligations and the need for strategic financial management to ensure long-term sustainability.
Peer comparison
Dec 31, 2024