Tandem Diabetes Care Inc (TNDM)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | -86,361 | -115,838 | -120,978 | -126,052 | -210,372 | -195,399 | -215,283 | -193,672 | -87,058 | -59,786 | -6,293 | 10,552 | 22,235 | 28,159 | 15,925 | -15,468 | -26,582 | -43,101 | -41,356 | -16,898 |
| Interest expense (ttm) | US$ in thousands | 6,663 | 6,000 | 8,975 | 8,787 | 9,276 | 9,158 | 5,396 | 4,869 | 4,313 | 4,795 | 4,795 | 4,795 | 4,795 | 7,760 | 11,293 | 13,436 | 13,084 | 8,560 | 4,009 | 797 |
| Interest coverage | -12.96 | -19.31 | -13.48 | -14.35 | -22.68 | -21.34 | -39.90 | -39.78 | -20.19 | -12.47 | -1.31 | 2.20 | 4.64 | 3.63 | 1.41 | -1.15 | -2.03 | -5.04 | -10.32 | -21.20 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-86,361K ÷ $6,663K
= -12.96
The interest coverage ratio measures a company's ability to pay its interest expenses on outstanding debt. A higher ratio indicates a stronger ability to meet interest obligations from operating income.
Tandem Diabetes Care Inc's interest coverage ratio deteriorated significantly in the first half of 2020, reaching distressing levels below -10. This suggests the company was unable to cover its interest payments with operating income during this period.
However, there was a notable improvement starting from June 2021, with the ratio gradually increasing and turning positive by September 2021. This positive trend continued through December 2021, indicating a healthier financial position as the company became more capable of servicing its interest expenses from operating profits.
The interest coverage ratio peaked in March 2022 at 4.64, showcasing a strong ability to cover interest payments. Nonetheless, the ratio declined in the following quarters, dropping back into negative territory by June 2022.
From September 2022 onwards, the interest coverage ratio remained negative, with values fluctuating but consistently below 0. This suggests ongoing challenges for Tandem Diabetes Care Inc in meeting its interest obligations with operating income, highlighting a potential strain on its financial health.
Overall, Tandem Diabetes Care Inc's interest coverage ratio has displayed periods of financial stress followed by improvements, but the recent negative trend indicates continued difficulties in efficiently covering interest expenses. Investors and creditors would closely monitor the company's ability to generate sufficient earnings to support its debt obligations.
Peer comparison
Dec 31, 2024