Viatris Inc (VTRS)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 766,200 | 1,614,900 | -34,000 | -210,800 | 654,900 |
| Interest expense | US$ in thousands | 573,100 | 592,400 | 636,200 | 497,800 | 517,300 |
| Interest coverage | 1.34 | 2.73 | -0.05 | -0.42 | 1.27 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $766,200K ÷ $573,100K
= 1.34
Interest coverage measures a company's ability to pay its interest expenses on outstanding debt. Higher values indicate a strong ability to meet interest obligations, while lower values may signal potential financial distress.
Viatris Inc's interest coverage has fluctuated significantly over the past five years, ranging from negative values to positive values. In 2023, the interest coverage ratio improved to 1.72 from 0.37 in 2021 but remained below the levels seen in 2022 and 2019. This suggests a moderate ability to cover interest payments.
The sharp increase in 2023 indicates an improvement in the company's ability to meet interest obligations compared to 2021 and 2020 when the ratios were lower. However, the ratio is still below the levels achieved in 2022 and 2019. It would be important for Viatris to sustain or further improve its interest coverage ratio to ensure sufficient financial stability and debt servicing capability.
Peer comparison
Dec 31, 2023