Adobe Systems Incorporated (ADBE)
Interest coverage
| Nov 29, 2024 | Dec 1, 2023 | Dec 2, 2022 | Dec 3, 2021 | Nov 27, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 6,741,000 | 6,912,000 | 6,120,000 | 5,818,000 | 4,292,000 |
| Interest expense | US$ in thousands | 169,000 | 113,000 | 112,000 | 113,000 | 116,000 |
| Interest coverage | 39.89 | 61.17 | 54.64 | 51.49 | 37.00 |
November 29, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $6,741,000K ÷ $169,000K
= 39.89
The interest coverage ratio measures a company's ability to pay interest on its debt obligations. Looking at the data provided for Adobe Systems Incorporated, we observe a positive trend in its interest coverage over the years.
As of November 27, 2020, the interest coverage ratio stood at 37.00, indicating that the company generated 37 times more operating income than the interest expense. Subsequently, there has been a steady improvement in Adobe's interest coverage ratio, reaching 51.49 on December 3, 2021, 54.64 on December 2, 2022, and further increasing to 61.17 on December 1, 2023.
However, there was a slight decline in the interest coverage ratio to 39.89 as of November 29, 2024. This decline could be attributed to various factors such as changes in interest rates, increased debt levels, or fluctuations in operating income.
Overall, Adobe Systems' interest coverage has shown a generally positive trend, indicating a strong ability to meet its interest obligations. It is essential for investors and creditors to continue monitoring this ratio to assess the company's financial health and debt repayment capacity.
Peer comparison
Nov 29, 2024