Tandem Diabetes Care Inc (TNDM)
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 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | -233,230 | -215,947 | -231,895 | -205,326 | -92,847 | -62,332 | -7,119 | 10,552 | 22,653 | 28,577 | 19,848 | 2,379 | -7,957 | -24,475 | -29,470 | -19,298 | -16,722 | -18,306 | -28,011 | -40,143 |
| Interest expense (ttm) | US$ in thousands | 10,878 | 10,161 | 6,897 | 6,829 | 6,208 | 6,143 | 6,078 | 6,050 | 6,468 | 9,729 | 13,073 | 14,785 | 12,851 | 8,078 | 3,283 | 71 | 77 | 74 | 1,415 | 4,518 |
| Interest coverage | -21.44 | -21.25 | -33.62 | -30.07 | -14.96 | -10.15 | -1.17 | 1.74 | 3.50 | 2.94 | 1.52 | 0.16 | -0.62 | -3.03 | -8.98 | -271.80 | -217.17 | -247.38 | -19.80 | -8.89 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-233,230K ÷ $10,878K
= -21.44
The interest coverage ratio for Tandem Diabetes Care Inc has shown significant fluctuations over the past eight quarters. The interest coverage ratio indicates the company's ability to meet its interest payments using its operating income.
From Q1 2022 to Q2 2023, the interest coverage ratio has been consistently below 1, indicating that Tandem Diabetes Care Inc has not generated enough operating income to cover its interest expenses from both its short-term and long-term debt obligations. This is a concerning trend as a value below 1 suggests that the company is not generating sufficient earnings to meet its interest payments.
The most notable improvement in the interest coverage ratio was seen from Q2 2022 to Q1 2023, where the ratio improved from -1.17 to -15.10. However, despite this improvement, the company's interest coverage remained negative, indicating the continuing struggles to generate enough earnings to cover interest expenses.
Overall, the interest coverage ratio for Tandem Diabetes Care Inc has been consistently low and negative, suggesting a significant financial risk due to the company's inability to generate enough income to cover its interest obligations. Investors and creditors may view this as a red flag, indicating potential liquidity issues and financial distress for the company in meeting its debt obligations.
Peer comparison
Dec 31, 2023