Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
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- Cash Flow Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Geographic Areas
- Price to FCFE (P/FCFE)
- Present Value of Free Cash Flow to Equity (FCFE)
- Operating Profit Margin since 2005
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Price to Sales (P/S) since 2005
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Solvency Ratios (Summary)
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
- Debt to Equity Ratio
- The debt to equity ratio initially increased from 1.09 at the first quarter of 2020 to a peak of 1.73 by the end of 2020. Subsequently, it exhibited a general downward trend throughout 2021 and 2022, reaching a low near 1.09 again in the last quarter of 2023. From 2024 onwards, the ratio showed some volatility, rising to 1.44 mid-year, then fluctuating around 1.3 to 1.38, reflecting moderate variation in capital structure leverage.
- Debt to Capital Ratio
- This ratio followed a similar trajectory, increasing from 0.52 in Q1 2020 to a peak of 0.63 in Q3 and Q4 2020. Thereafter, it declined gradually through 2021 and 2022, hovering around 0.53 to 0.55 in late 2023. The ratio then experienced modest increases in 2024, with the highest value at 0.59, before stabilizing near 0.57 by Q1 2025, indicating a relatively stable but slightly fluctuating balance between debt and total capital.
- Debt to Assets Ratio
- This ratio increased from 0.40 in early 2020 to around 0.48 in Q3 2020, then decreased slightly to about 0.39 by the end of 2021. It remained stable within the 0.40 to 0.42 range through most of 2022 and 2023. In 2024, the ratio showed some increase reaching 0.45, and then slightly declining again to 0.44 by Q1 2025, suggesting consistent asset financing through debt during the period but with minor fluctuations.
- Financial Leverage
- Financial leverage rose from 2.71 at the beginning of 2020 to a high of 3.76 by year-end 2020. It then decreased gradually to around 2.72 by late 2023. During 2024, leverage levels showed increased volatility, peaking at 3.21 in mid-2024 and then fluctuating around an average of 3.0 towards the end of the period. Overall, leverage trends indicate moderate variations in reliance on debt financing with some periods of deleveraging followed by partial re-leveraging.
- Interest Coverage Ratio
- The interest coverage ratio data begins from Q3 2020 at 2.7 and increased significantly by mid-2021, reaching a peak of 10.06 in Q3 2021. After this, it consistently remained high throughout 2021 and 2022, generally between 5.8 and 9.0, reflecting strong ability to cover interest expenses. In 2023, the ratio stayed elevated mostly above 8.0 until late in the year when it started to decline sharply, hitting as low as 1.18 in Q3 2024. A recovery is observed by Q1 2025 with the coverage reaching 7.94. This pattern suggests fluctuating interest expense coverage capacity with a period of considerable weakening followed by recovery.
Debt Ratios
Coverage Ratios
Debt to Equity
Mar 31, 2025 | 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 | ||||||||
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Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
Current portion of long-term debt, net | ||||||||||||||||||||||||||||
Long-term debt, net, excluding current portion | ||||||||||||||||||||||||||||
Total debt | ||||||||||||||||||||||||||||
Total Gilead stockholders’ equity | ||||||||||||||||||||||||||||
Solvency Ratio | ||||||||||||||||||||||||||||
Debt to equity1 | ||||||||||||||||||||||||||||
Benchmarks | ||||||||||||||||||||||||||||
Debt to Equity, Competitors2 | ||||||||||||||||||||||||||||
AbbVie Inc. | ||||||||||||||||||||||||||||
Amgen Inc. | ||||||||||||||||||||||||||||
Bristol-Myers Squibb Co. | ||||||||||||||||||||||||||||
Danaher Corp. | ||||||||||||||||||||||||||||
Eli Lilly & Co. | ||||||||||||||||||||||||||||
Johnson & Johnson | ||||||||||||||||||||||||||||
Merck & Co. Inc. | ||||||||||||||||||||||||||||
Pfizer Inc. | ||||||||||||||||||||||||||||
Regeneron Pharmaceuticals Inc. | ||||||||||||||||||||||||||||
Thermo Fisher Scientific Inc. | ||||||||||||||||||||||||||||
Vertex Pharmaceuticals Inc. |
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q1 2025 Calculation
Debt to equity = Total debt ÷ Total Gilead stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- Over the observed periods, total debt exhibits fluctuations with an initial increase from approximately $24.1 billion in the first quarter of 2020 to a peak near $31.4 billion by the end of 2020. This is followed by a gradual decline through 2021 and 2022, reaching approximately $25.2 billion by the end of 2022. Debt levels remain relatively stable through 2023 before demonstrating some volatility in 2024, including a notable decrease to about $23.3 billion in the third quarter and a subsequent rise to $26.7 billion by the end of 2024. The debt level returns to approximately $24.9 billion in the first quarter of 2025, indicating a generally active management of debt within a range between $23 billion and $32 billion over the five-year period.
- Total Stockholders' Equity
- Stockholders' equity shows a declining trend in the initial quarters of 2020, falling from about $22.1 billion to around $17.4 billion by the third quarter of 2020. A recovery trend is observed throughout 2021, with equity increasing to approximately $21.5 billion in the third quarter before slightly decreasing by the end of the year. During 2022 and most of 2023, equity remains relatively stable, fluctuating between roughly $20.0 billion and $22.3 billion. However, a significant decline occurs in early 2024, with equity dropping to approximately $17.5 billion in the first quarter, followed by a modest recovery that stabilizes near $19.3 billion by the first quarter of 2025. This pattern suggests periods of equity strengthening intermixed with phases of contraction potentially reflective of operational or market factors.
- Debt to Equity Ratio
- The debt to equity ratio follows a volatile but somewhat downward trajectory from a starting point of 1.09 in the first quarter of 2020, increasing sharply to 1.73 by the fourth quarter of 2020. It then declines consistently through 2021, reaching around 1.12 by the fourth quarter. The ratio holds relatively stable slightly above 1.1 through 2022 and 2023, indicating a reduced leverage compared to 2020 levels. In 2024, the ratio increases again, peaking at 1.44 in the first quarter before decreasing to near 1.26 towards the end of the year. This indicates a dynamic leverage position influenced by variations in both debt and equity, with a tendency to keep leverage moderately above 1 throughout the later periods.
Debt to Capital
Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
Current portion of long-term debt, net | ||||||||||||||||||||||||||||
Long-term debt, net, excluding current portion | ||||||||||||||||||||||||||||
Total debt | ||||||||||||||||||||||||||||
Total Gilead stockholders’ equity | ||||||||||||||||||||||||||||
Total capital | ||||||||||||||||||||||||||||
Solvency Ratio | ||||||||||||||||||||||||||||
Debt to capital1 | ||||||||||||||||||||||||||||
Benchmarks | ||||||||||||||||||||||||||||
Debt to Capital, Competitors2 | ||||||||||||||||||||||||||||
AbbVie Inc. | ||||||||||||||||||||||||||||
Amgen Inc. | ||||||||||||||||||||||||||||
Bristol-Myers Squibb Co. | ||||||||||||||||||||||||||||
Danaher Corp. | ||||||||||||||||||||||||||||
Eli Lilly & Co. | ||||||||||||||||||||||||||||
Johnson & Johnson | ||||||||||||||||||||||||||||
Merck & Co. Inc. | ||||||||||||||||||||||||||||
Pfizer Inc. | ||||||||||||||||||||||||||||
Regeneron Pharmaceuticals Inc. | ||||||||||||||||||||||||||||
Thermo Fisher Scientific Inc. | ||||||||||||||||||||||||||||
Vertex Pharmaceuticals Inc. |
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q1 2025 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt level showed an increasing trend from March 31, 2020, reaching a peak during the last quarter of 2020 at approximately US$31.4 billion. Thereafter, debt gradually declined through 2021 and into early 2022, stabilizing around the US$25 billion mark. From mid-2023 onward, total debt remained relatively flat with minor fluctuations, though a notable uptick occurred in the third quarter of 2024 before returning closer to US$25 billion by the end of that year.
- Total Capital
- Total capital fluctuated over the timeframe but generally maintained a range between roughly US$41.6 billion and US$49.8 billion. Notably, capital declined between late 2023 and mid-2024, reaching a low near US$41.6 billion before rebounding toward US$46 billion in early 2025. The variations suggest episodic changes in equity or other capital components alongside the movements in debt.
- Debt to Capital Ratio
- The debt to capital ratio started at 0.52 in the first quarter of 2020 and increased steadily, peaking at 0.63 in the third and fourth quarters of 2020. A gradual reduction followed in 2021, declining to about 0.53 by late 2022. The ratio exhibited some volatility in 2024, rising back to 0.59 in the first quarter before fluctuating between 0.55 and 0.58 through early 2025. This ratio indicates a general trend of increasing leverage during 2020, followed by a modest deleveraging phase, then some resurgence in leverage toward the later periods.
- Overall Observations
- The data reflects that leverage increased significantly during the early pandemic period and was somewhat reduced in the two subsequent years, potentially reflecting a strategic effort to manage debt levels amidst changing market conditions. The relative stability in debt levels after mid-2022, paired with fluctuations in total capital, suggests ongoing balance sheet management efforts. The debt to capital ratio's movement corresponds closely with these shifts, indicating that capital structure adjustments are aligned with variations in debt and equity financing components over time.
Debt to Assets
Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
Current portion of long-term debt, net | ||||||||||||||||||||||||||||
Long-term debt, net, excluding current portion | ||||||||||||||||||||||||||||
Total debt | ||||||||||||||||||||||||||||
Total assets | ||||||||||||||||||||||||||||
Solvency Ratio | ||||||||||||||||||||||||||||
Debt to assets1 | ||||||||||||||||||||||||||||
Benchmarks | ||||||||||||||||||||||||||||
Debt to Assets, Competitors2 | ||||||||||||||||||||||||||||
AbbVie Inc. | ||||||||||||||||||||||||||||
Amgen Inc. | ||||||||||||||||||||||||||||
Bristol-Myers Squibb Co. | ||||||||||||||||||||||||||||
Danaher Corp. | ||||||||||||||||||||||||||||
Eli Lilly & Co. | ||||||||||||||||||||||||||||
Johnson & Johnson | ||||||||||||||||||||||||||||
Merck & Co. Inc. | ||||||||||||||||||||||||||||
Pfizer Inc. | ||||||||||||||||||||||||||||
Regeneron Pharmaceuticals Inc. | ||||||||||||||||||||||||||||
Thermo Fisher Scientific Inc. | ||||||||||||||||||||||||||||
Vertex Pharmaceuticals Inc. |
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q1 2025 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt shows a pattern of fluctuations across the observed periods. Starting from approximately 24.1 billion US dollars in early 2020, there is an upward trend peaking near 31.4 billion by the end of 2020. Following this peak, the debt gradually declines with minor variations, reaching a lower level close to 23.3 billion in mid-2024. However, a notable spike occurs towards the end of 2024, with total debt increasing again to around 26.7 billion before slightly decreasing to approximately 24.9 billion in early 2025.
- Total Assets
- Total assets initially increase from around 59.7 billion US dollars at the start of 2020 to a peak exceeding 68 billion by the end of 2020. Subsequently, assets experience a general downward trend throughout 2021, reaching just under 63 billion by early 2022. From this point forward, assets maintain a relatively stable range, fluctuating modestly around the low 60s billion until early 2023, after which a more pronounced decline is observed, dropping to approximately 53.6 billion by mid-2024. A modest recovery occurs thereafter, with assets rising to close to 59 billion by the end of 2024, followed by a slight decrease to about 56.4 billion in early 2025.
- Debt to Assets Ratio
- This ratio reflects the relationship between total debt and total assets and exhibits variation throughout the period. Starting near 0.40 in early 2020, the ratio climbs to a peak of about 0.48 in late 2020, coinciding with the highest total debt observed. After this peak, the ratio declines steadily, reaching a low near 0.39 in late 2021, indicating a reduction in leverage relative to assets. From early 2022 to early 2023, the ratio remains fairly stable, hovering around 0.40 to 0.41. However, it begins to rise again in 2024, peaking near 0.45 at multiple points, which corresponds with the noted fluctuations in debt and the declining asset base during this period.
Financial Leverage
Mar 31, 2025 | 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 | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
Total assets | ||||||||||||||||||||||||||||
Total Gilead stockholders’ equity | ||||||||||||||||||||||||||||
Solvency Ratio | ||||||||||||||||||||||||||||
Financial leverage1 | ||||||||||||||||||||||||||||
Benchmarks | ||||||||||||||||||||||||||||
Financial Leverage, Competitors2 | ||||||||||||||||||||||||||||
AbbVie Inc. | ||||||||||||||||||||||||||||
Amgen Inc. | ||||||||||||||||||||||||||||
Bristol-Myers Squibb Co. | ||||||||||||||||||||||||||||
Danaher Corp. | ||||||||||||||||||||||||||||
Eli Lilly & Co. | ||||||||||||||||||||||||||||
Johnson & Johnson | ||||||||||||||||||||||||||||
Merck & Co. Inc. | ||||||||||||||||||||||||||||
Pfizer Inc. | ||||||||||||||||||||||||||||
Regeneron Pharmaceuticals Inc. | ||||||||||||||||||||||||||||
Thermo Fisher Scientific Inc. | ||||||||||||||||||||||||||||
Vertex Pharmaceuticals Inc. |
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q1 2025 Calculation
Financial leverage = Total assets ÷ Total Gilead stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total Assets
-
Total assets exhibit variability over the observed periods, beginning at approximately 59.7 billion USD in March 2020. There is a general upward trend reaching a peak near 68.4 billion USD by December 2020, followed by a gradual decline through 2022 and early 2023. Limited recovery is noted with fluctuations around the 62 to 63 billion USD range until early 2024. Further decline occurs in mid-2024 to values as low as around 53.6 billion USD, with a partial rebound toward the end of 2024 and into the first quarter of 2025, ending near 56.4 billion USD. This pattern suggests a period of expansion followed by contraction and moderate recovery within the asset base over five years.
- Total Stockholders’ Equity
-
Stockholders’ equity shows significant fluctuations, starting at approximately 22.1 billion USD in March 2020, declining sharply until September 2020, reaching approximately 17.4 billion USD. From that point, equity shows a steady increase until December 2021, surpassing 21 billion USD. In 2022 and early 2023, values remain relatively stable between 20 and 22 billion USD, eventually increasing to a peak of roughly 22.8 billion USD by December 2023. Subsequently, equity experiences a notable decline in the first half of 2024, dropping to around 17.5 billion USD by March 2024 with a slight recovery thereafter. By the first quarter of 2025, equity stabilizes near 19.2 billion USD. The data indicates episodes of both growth and significant contraction within shareholders’ equity, reflecting potentially variable profitability or capital adjustments.
- Financial Leverage
-
Financial leverage, calculated as a ratio, follows a decreasing trend with some fluctuations. Beginning at 2.71 in March 2020, leverage rises to a peak of 3.76 in December 2020. Thereafter, it decreases steadily to approximately 2.8 by December 2023. The ratio shows some variability during 2024, ranging between 2.72 and 3.21, and ends at about 2.95 in March 2025. This decline in financial leverage suggests a gradual reduction in reliance on debt relative to equity over the period, indicating a possible shift towards a more conservative capital structure following the peak leverage in late 2020.
Interest Coverage
Mar 31, 2025 | 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 | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||
Net income (loss) attributable to Gilead | ||||||||||||||||||||||||||||
Add: Net income attributable to noncontrolling interest | ||||||||||||||||||||||||||||
Add: Income tax expense | ||||||||||||||||||||||||||||
Add: Interest expense | ||||||||||||||||||||||||||||
Earnings before interest and tax (EBIT) | ||||||||||||||||||||||||||||
Solvency Ratio | ||||||||||||||||||||||||||||
Interest coverage1 | ||||||||||||||||||||||||||||
Benchmarks | ||||||||||||||||||||||||||||
Interest Coverage, Competitors2 | ||||||||||||||||||||||||||||
Amgen Inc. | ||||||||||||||||||||||||||||
Danaher Corp. | ||||||||||||||||||||||||||||
Johnson & Johnson | ||||||||||||||||||||||||||||
Regeneron Pharmaceuticals Inc. | ||||||||||||||||||||||||||||
Thermo Fisher Scientific Inc. | ||||||||||||||||||||||||||||
Vertex Pharmaceuticals Inc. |
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q1 2025 Calculation
Interest coverage
= (EBITQ1 2025
+ EBITQ4 2024
+ EBITQ3 2024
+ EBITQ2 2024)
÷ (Interest expenseQ1 2025
+ Interest expenseQ4 2024
+ Interest expenseQ3 2024
+ Interest expenseQ2 2024)
= ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
- Earnings before interest and tax (EBIT)
- The EBIT exhibits notable fluctuations across the quarters. It reached a significant negative value of -2733 million USD in June 2020 but rebounded sharply to positive values thereafter. The following quarters experienced volatility with peaks such as 3688 million USD in September 2021 and troughs including -4232 million USD in March 2024. Overall, the trend lacks steady growth, characterized by substantial oscillations with intermittent highs above 2500 million USD and lows dipping into negative territory.
- Interest expense
- Interest expense remains relatively stable over the analyzed periods, fluctuating narrowly between 226 million USD and 267 million USD. There is no significant upward or downward trend, indicating consistent borrowing costs or interest obligations sustained throughout the quarters without major variation.
- Interest coverage ratio
- The interest coverage ratio, which measures the ability to meet interest payments from EBIT, shows notable volatility. It generally remains above 1, indicating coverage of interest expenses, with values reaching highs over 10 in periods such as December 2020. However, there are quarters with notably lower coverage, for example, values close to or below 2.0 in March 2020 and March 2024. This variability reflects the underlying oscillations in EBIT, as interest expense remains stable.
- Overall observations
- The data reveals a pattern of cyclical earnings performance, potentially influenced by variable operational factors or extraordinary items impacting EBIT. Despite this fluctuation, the company maintains relatively stable interest expenses, suggesting consistent debt levels or credit arrangements. The interest coverage ratio’s swings primarily correspond to EBIT volatility, indicating periods of robust earnings capable of comfortably covering interest costs interspersed with quarters that raise potential liquidity concerns. Monitoring EBIT stability should be a priority to ensure sustained interest coverage.