Advanced Micro Devices Inc (AMD)

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	2,114,000	1,591,000	1,110,000	811,000	614,000	103,000	-221,000	273,000	1,286,000	2,611,000	3,661,000	3,968,000	3,709,000	3,056,000	2,457,000	1,799,000	1,327,000	992,000	730,000	617,000
Interest expense (ttm)	US$ in thousands	92,000	100,000	103,000	106,000	106,000	98,000	103,000	100,000	88,000	77,000	53,000	38,000	34,000	35,000	39,000	43,000	47,000	56,000	69,000	80,000
Interest coverage		22.98	15.91	10.78	7.65	5.79	1.05	-2.15	2.73	14.61	33.91	69.08	104.42	109.09	87.31	63.00	41.84	28.23	17.71	10.58	7.71

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $2,114,000K ÷ $92,000K
= 22.98

The interest coverage ratio for Advanced Micro Devices Inc has shown a generally increasing trend from March 2020 to June 2021, indicating the company's improving ability to cover its interest expenses with operating income. The ratio significantly improved from 7.71 in March 2020 to 63.00 in June 2021, peaking at 109.09 in December 2021.

However, starting from March 2022, the interest coverage ratio began to decline, reaching 2.73 in March 2023, which may indicate a potential strain on the company's ability to cover interest expenses with operating income. The ratio even turned negative in June 2023 (-2.15), suggesting that the company's operating income may not be sufficient to cover its interest obligations during that period.

Although the interest coverage ratio recovered slightly in the subsequent quarters, the trend remained volatile, indicating potential fluctuating performance and financial challenges for Advanced Micro Devices Inc in managing its interest payments. Investors and stakeholders should keep a close eye on the company's ability to generate sufficient operating income to cover its interest expenses in the coming periods.