Broadcom Inc (AVGO)
Interest coverage
| Feb 4, 2024 | Oct 29, 2023 | Jul 30, 2023 | Apr 30, 2023 | Jan 29, 2023 | Oct 30, 2022 | Jul 31, 2022 | May 1, 2022 | Jan 30, 2022 | Oct 31, 2021 | Aug 1, 2021 | May 2, 2021 | Jan 31, 2021 | Nov 1, 2020 | Aug 2, 2020 | May 3, 2020 | Feb 2, 2020 | Nov 3, 2019 | Aug 4, 2019 | May 5, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 14,187,000 | 16,207,000 | 15,953,000 | 15,834,000 | 15,220,000 | 14,225,000 | 12,820,000 | 11,209,000 | 9,790,000 | 8,519,000 | 7,464,000 | 6,346,000 | 5,137,000 | 4,014,000 | 3,542,000 | 3,440,000 | 3,705,000 | 3,604,000 | 4,120,000 | 4,591,000 |
| Interest expense (ttm) | US$ in thousands | 2,142,000 | 1,622,000 | 1,623,000 | 1,623,000 | 1,736,000 | 1,737,000 | 1,765,000 | 1,774,000 | 1,722,000 | 1,885,000 | 1,871,000 | 1,920,000 | 1,941,000 | 1,777,000 | 1,718,000 | 1,616,000 | 1,505,000 | 1,444,000 | 1,231,000 | 1,018,000 |
| Interest coverage | 6.62 | 9.99 | 9.83 | 9.76 | 8.77 | 8.19 | 7.26 | 6.32 | 5.69 | 4.52 | 3.99 | 3.31 | 2.65 | 2.26 | 2.06 | 2.13 | 2.46 | 2.50 | 3.35 | 4.51 |
February 4, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $14,187,000K ÷ $2,142,000K
= 6.62
Broadcom Inc's interest coverage ratio has exhibited fluctuations over the past several periods. The ratio, which measures the company's ability to meet interest payments on its debt, has ranged from a high of 9.99 to a low of 2.06.
In recent periods, Broadcom's interest coverage has generally been healthy, with ratios comfortably above 5. This indicates that the company's operating income is sufficiently high to cover its interest expenses, providing a buffer against potential financial difficulties.
However, it is worth noting that there have been instances where the interest coverage ratio has dipped below 4, such as in the earlier periods of 2021 and 2020. During these times, the company may have had less financial flexibility to manage its debt obligations, potentially indicating a period of increased financial risk.
Overall, while Broadcom's interest coverage ratios have shown variability, the company has generally maintained a solid ability to cover its interest payments. Investors and analysts may monitor future ratios to assess the company's financial health and risk management.
Peer comparison
Feb 4, 2024