Alphabet Inc Class C (GOOG)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 112,390,000 | 86,025,000 | 71,685,000 | 91,080,000 | 48,217,000 |
| Interest expense | US$ in thousands | 194,000 | 308,000 | 357,000 | 346,000 | 135,000 |
| Interest coverage | 579.33 | 279.30 | 200.80 | 263.24 | 357.16 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $112,390,000K ÷ $194,000K
= 579.33
Interest coverage is a key financial metric that indicates a company's ability to cover its interest expenses with its earnings before interest and taxes (EBIT). For Alphabet Inc Class C, the interest coverage ratio has been consistently strong over the past few years, reflecting the company's ability to comfortably meet its interest obligations.
As of December 31, 2020, Alphabet Inc Class C had an interest coverage ratio of 357.16, indicating that it generated 357 times the earnings needed to cover its interest expenses for that period. This exceptionally high ratio suggests that the company had ample earnings to easily meet its interest payments.
By December 31, 2021, the interest coverage ratio decreased to 263.24, still signaling a robust ability to cover interest costs. While the ratio dipped from the previous year, it remained at a level that indicates a healthy financial position.
In the following years, the interest coverage ratio continued to demonstrate strength, with values of 200.80 as of December 31, 2022, 279.30 as of December 31, 2023, and a notable increase to 579.33 as of December 31, 2024. These figures suggest that Alphabet Inc Class C maintained a solid ability to meet its interest obligations, with the ratio peaking in 2024.
Overall, the consistent and generally high interest coverage ratios of Alphabet Inc Class C indicate the company's sound financial health and ability to manage its debt obligations effectively. The ratios suggest a strong capacity to generate earnings in excess of interest expenses, enhancing its financial stability and creditworthiness.
Peer comparison
Dec 31, 2024