Dell Technologies Inc (DELL)

Interest coverage

		Jan 31, 2025	Feb 2, 2024	Jan 31, 2024	Feb 3, 2023	Jan 31, 2023
Earnings before interest and tax (EBIT)	US$ in thousands	—	5,404,000	5,443,000	4,467,000	5,771,000
Interest expense	US$ in thousands	1,189,000	1,501,000	1,545,000	1,222,000	1,222,000
Interest coverage		0.00	3.60	3.52	3.66	4.72

January 31, 2025 calculation

Interest coverage = EBIT ÷ Interest expense
= $—K ÷ $1,189,000K
= 0.00

Dell Technologies Inc's interest coverage has shown some fluctuations over the years. As of January 31, 2023, the interest coverage ratio was 4.72, indicating that the company generated operating income almost 5 times more than its interest expenses. However, this ratio decreased to 3.66 by February 3, 2023, suggesting a slight decrease in the ability to cover interest payments.

In the following year, the interest coverage ratio continued to decline to 3.52 as of January 31, 2024, and then improved slightly to 3.60 by February 2, 2024. These figures indicate that Dell faced challenges in covering its interest charges during this period.

Notably, as of January 31, 2025, the interest coverage ratio dropped significantly to 0.00, which raises concerns about Dell's ability to generate sufficient operating income to cover its interest expenses. This could signal potential financial distress for the company if this trend persists.

Overall, Dell Technologies Inc's interest coverage has experienced fluctuations, with a notable decline in recent years, indicating a need for the company to closely monitor its financial performance and leverage strategies to improve its ability to meet interest obligations.