Zimmer Biomet Holdings Inc (ZBH)

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	1,277,700	895,200	873,900	825,200	696,300	858,400	856,100	800,000	860,300	1,138,100	1,194,300	797,800	83,100	8,300	-45,100	331,300	1,137,500	10,200	-12,300	79,000
Interest expense (ttm)	US$ in thousands	201,200	193,500	184,700	171,900	164,800	171,000	181,300	197,200	208,400	212,700	214,100	213,400	212,000	211,300	214,100	219,800	226,900	240,700	252,200	268,400
Interest coverage		6.35	4.63	4.73	4.80	4.23	5.02	4.72	4.06	4.13	5.35	5.58	3.74	0.39	0.04	-0.21	1.51	5.01	0.04	-0.05	0.29

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,277,700K ÷ $201,200K
= 6.35

The interest coverage ratio for Zimmer Biomet Holdings Inc has shown a consistently positive trend over the past eight quarters. The ratio has ranged between 4.95 and 7.83, indicating that the company's operating income has been sufficient to cover its interest expenses by a comfortable margin.

The increasing trend in the interest coverage ratio from Q1 2022 to Q1 2023 is a positive sign, showing that the company's ability to cover interest payments has been improving over time. This improvement suggests that Zimmer Biomet Holdings Inc has been managing its debt effectively and generating healthy levels of operating income to meet its interest obligations.

With interest coverage ratios consistently above 1 (indicating that the company's operating income exceeds its interest expense), Zimmer Biomet Holdings Inc appears to have a strong financial position in terms of its ability to meet its debt obligations. Investors and creditors often view high interest coverage ratios positively as they indicate a lower risk of default due to the company's ability to service its debt comfortably.