Zimmer Biomet Holdings Inc (ZBH)

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	1,285,700	1,250,900	1,238,000	1,216,300	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
Interest expense (ttm)	US$ in thousands	218,000	206,400	203,200	203,700	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
Interest coverage		5.90	6.06	6.09	5.97	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

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,285,700K ÷ $218,000K
= 5.90

Interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt. It is calculated by dividing earnings before interest and taxes (EBIT) by interest expense.

In the case of Zimmer Biomet Holdings Inc, the interest coverage ratio has fluctuated over the past few years. As of December 31, 2024, the interest coverage ratio was 5.90, indicating the company generated 5.9 times the amount of earnings needed to cover its interest expenses in that period.

Overall, the interest coverage ratio for Zimmer Biomet Holdings Inc has shown a generally improving trend since the negative ratios in mid-2020, reaching a peak of 6.35 on December 31, 2023. This suggests improved financial health and the company's ability to comfortably cover its interest obligations from its operating earnings.

It is important for investors and creditors to monitor the interest coverage ratio over time to assess the company's ability to manage its debt effectively and avoid financial distress.