Applied Materials Inc (AMAT)
Interest coverage
| Oct 31, 2024 | Oct 27, 2024 | Oct 31, 2023 | Oct 29, 2023 | Oct 31, 2022 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 7,867,000 | 7,867,000 | 7,654,000 | 7,954,000 | 7,784,000 |
| Interest expense | US$ in thousands | 247,000 | 247,000 | 238,000 | 238,000 | 228,000 |
| Interest coverage | 31.85 | 31.85 | 32.16 | 33.42 | 34.14 |
October 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $7,867,000K ÷ $247,000K
= 31.85
Interest coverage measures the company's ability to meet its interest obligations on outstanding debt. Applied Materials Inc's interest coverage has shown a gradual decline over the years, with the ratio decreasing from 34.14 on October 31, 2022, to 31.85 on October 31, 2024. This indicates that the company's ability to cover its interest expenses with its earnings has weakened slightly over time. Despite the decline, Applied Materials Inc still maintains a relatively healthy interest coverage ratio above 1, suggesting that it generates sufficient earnings to meet its interest payments comfortably. However, management should continue monitoring this trend to ensure financial stability and sustainability in the long term.
Peer comparison
Oct 31, 2024