Cisco Systems Inc (CSCO)
Interest coverage
| Jul 31, 2024 | Jul 27, 2024 | Jul 31, 2023 | Jul 29, 2023 | Jul 31, 2022 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 13,240,000 | 12,181,000 | 15,745,000 | 15,745,000 | 14,837,000 |
| Interest expense | US$ in thousands | 1,006,000 | 1,006,000 | 427,000 | 427,000 | 360,000 |
| Interest coverage | 13.16 | 12.11 | 36.87 | 36.87 | 41.21 |
July 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $13,240,000K ÷ $1,006,000K
= 13.16
Interest coverage ratio indicates a company's ability to meet its interest obligations on outstanding debt. A higher ratio suggests that the company is more capable of servicing its debt. Analyzing Cisco Systems Inc's interest coverage over the years, we observe a relatively strong performance with the ratio ranging from 12.11 to 41.21. The ratio peaked at 41.21 in July 2022, indicating robust capability to cover interest expenses. However, there was a gradual decline in subsequent years, with the ratio stabilizing around 36.87 in July 2023 and then decreasing to levels around 12.11 to 13.16 in 2024. This decline may signal a potential decrease in the company's ability to cover interest costs, which could be a concern for investors and lenders. Cisco should monitor and manage its debt levels effectively to maintain a healthy interest coverage ratio in the future.
Peer comparison
Jul 31, 2024