Vertex Pharmaceuticals (WBO:VRTX) Interest Coverage

: 90.19 (As of Dec. 2023)

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Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income by its Interest Expense. Vertex Pharmaceuticals's Operating Income for the three months ended in Dec. 2023 was €877 Mil. Vertex Pharmaceuticals's Interest Expense for the three months ended in Dec. 2023 was €-10 Mil. Vertex Pharmaceuticals's interest coverage for the quarter that ended in Dec. 2023 was 90.19. The higher the ratio, the stronger the company's financial strength is.

Good Sign:

Ben Graham prefers companies' interest coverage to be at least 5. Vertex Pharmaceuticals Inc has enough cash to cover all of its debt. Its financial situation is stable.

The historical rank and industry rank for Vertex Pharmaceuticals's Interest Coverage or its related term are showing as below:

WBO:VRTX' s Interest Coverage Range Over the Past 10 Years
Min: 0.14 Med: 34.93 Max: 97.68
Current: 97.68

WBO:VRTX's Interest Coverage is ranked worse than
52.69% of 353 companies
in the Biotechnology industry
Industry Median: 144.99 vs WBO:VRTX: 97.68

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Vertex Pharmaceuticals Interest Coverage Historical Data

The historical data trend for Vertex Pharmaceuticals's Interest Coverage can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.

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Vertex Pharmaceuticals Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Interest Coverage

20.55

49.30

63.29

79.66

97.68

Vertex Pharmaceuticals Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Interest Coverage																91.20	98.61	101.45	100.09	90.19

Competitive Comparison

For the Biotechnology subindustry, Vertex Pharmaceuticals's Interest Coverage, along with its competitors' market caps and Interest Coverage data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Vertex Pharmaceuticals Interest Coverage Distribution

For the Biotechnology industry and Healthcare sector, Vertex Pharmaceuticals's Interest Coverage distribution charts can be found below:

* The bar in red indicates where Vertex Pharmaceuticals's Interest Coverage falls into.

Vertex Pharmaceuticals Interest Coverage Calculation

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

If Interest Expense is negative and Operating Income is positive, then

Interest Coverage

-1

Operating Income

Interest Expense

Else if Interest Expense is negative and Operating Income is negative, then

The company did not have earnings to cover the interest expense.

Else if Interest Expense is 0 and Long-Term Debt & Capital Lease Obligation is 0, then

The company had no debt ⁽¹⁾.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Vertex Pharmaceuticals's Interest Coverage for the fiscal year that ended in Dec. 2023 is calculated as

Here, for the fiscal year that ended in Dec. 2023, Vertex Pharmaceuticals's Interest Expense was €-40 Mil. Its Operating Income was €3,950 Mil. And its Long-Term Debt & Capital Lease Obligation was €665 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Dec. 2023 )	/	Interest Expense (A: Dec. 2023 )
	=	-1	*	3949.977	/	-40.44
	=	97.68

Vertex Pharmaceuticals's Interest Coverage for the quarter that ended in Dec. 2023 is calculated as

Here, for the three months ended in Dec. 2023, Vertex Pharmaceuticals's Interest Expense was €-10 Mil. Its Operating Income was €877 Mil. And its Long-Term Debt & Capital Lease Obligation was €665 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Dec. 2023 )	/	Interest Expense (Q: Dec. 2023 )
	=	-1	*	876.652	/	-9.72
	=	90.19

The higher the ratio, the stronger the company's Financial Strength is.

Vertex Pharmaceuticals (WBO:VRTX) Interest Coverage Explanation

Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.

Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .

Vertex Pharmaceuticals Interest Coverage Related Terms

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Vertex Pharmaceuticals (WBO:VRTX) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Biotechnology » Vertex Pharmaceuticals Inc (WBO:VRTX) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

VRTX:USA VRTX:Mexico 1VRTX:Italy VX1d:UK VX1:Germany VRTX34:Brazil

Address

50 Northern Avenue, Boston, MA, USA, 02210

Website

https://www.vrtx.com

Vertex Pharmaceuticals is a global biotechnology company that discovers and develops small-molecule drugs for the treatment of serious diseases. Its key drugs are Kalydeco, Orkambi, Symdeko, and Trikafta/Kaftrio for cystic fibrosis, where Vertex therapies remain the standard of care globally. Vertex is diversifying its pipeline through gene-editing therapies such as CTX001 for beta thalassemia and sickle-cell disease, small-molecule inhibitors targeting acute and chronic pain using nonopioid treatments, and small-molecule inhibitors of APOL1-mediated kidney diseases. Vertex is also investigating cell therapies to deliver a potential functional cure for type 1 diabetes.