Veracyte Inc (VCYT)

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 25,746 -76,597 -36,229 -81,408 -34,680
Interest expense US$ in thousands 2 15 198 241 229
Interest coverage 12,873.00 -5,106.47 -182.97 -337.79 -151.44

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $25,746K ÷ $2K
= 12,873.00

The interest coverage ratios for Veracyte Inc. over the specified periods reveal a pattern of significant fluctuations, transitioning from highly negative values to a positive figure in 2024. In the fiscal year ending December 31, 2020, the ratio stood at -151.44, indicating a substantial inability to cover interest expenses through operating earnings. This pattern persisted through 2021 and 2022, with ratios of -337.79 and -182.97 respectively, emphasizing continued financial distress and insufficient operating income to meet interest obligations.

By the fiscal year ending December 31, 2023, the ratio remained deeply negative at -5,106.47, reflecting persistent challenges in generating adequate earnings to cover interest expenses, possibly compounded by increased interest liabilities or diminished operating income. However, a dramatic turnaround is observed in 2024, with the interest coverage ratio rising sharply to 12,873.00. This positive figure signifies that Veracyte Inc. was able to generate substantially more operating income than its interest expenses in that year, indicating a significant improvement in financial health in terms of interest obligation coverage.

Overall, the historical data demonstrate a trajectory of severity in interest coverage deficiencies during 2020–2023, followed by a marked recovery in 2024. This transition points toward a significant enhancement in the company's ability to service its interest commitments, potentially due to operational improvements, debt restructuring, or other strategic financial management actions undertaken in that year.