Vir Biotechnology Inc (VIR)

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 -552,122 -570,044 -540,001 -619,694 -685,157 -698,879 -319,238 -334,584 821,120 1,519,747 1,273,772 1,559,261 388,851 -264,610 -297,342 -384,488 -297,454 -253,504 -213,569 -220,593
Interest expense (ttm) US$ in thousands 0 239 239 239 478 9,959 19,291 39,180 39,329 29,609 20,277 388 0 0 0 0 0 0 0 0
Interest coverage — -2,385.12 -2,259.42 -2,592.86 -1,433.38 -70.18 -16.55 -8.54 20.88 51.33 62.82 4,018.71 — — — — — — — —

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-552,122K ÷ $0K
= —

Interest coverage ratio measures a company's ability to pay its interest expenses on outstanding debt. A higher ratio indicates that the company is more capable of meeting its interest obligations.

For Vir Biotechnology Inc, the interest coverage ratio was not available (denoted by "—") for the periods up to December 31, 2021. Starting from March 31, 2022, the interest coverage ratio was extremely high at 4,018.71, suggesting a strong ability to cover interest payments.

However, the ratio dropped significantly in the following quarters, indicating a decline in the company's ability to cover its interest expenses. The ratio turned negative in the periods from March 31, 2023, to December 31, 2024, which implies that the company's earnings were not sufficient to cover its interest costs during those periods.

The negative interest coverage ratios from March 31, 2023, to December 31, 2024, raise concerns about Vir Biotechnology Inc's financial stability and ability to meet its debt obligations solely through operating income. Further investigation into the company's financial health and debt management strategies may be necessary to understand the reasons behind the negative ratios and assess the risks associated with its debt levels.