International Business Machines (IBM)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 10,285,000 | 2,229,000 | 7,022,000 | 5,518,000 | 10,835,000 |
| Interest expense | US$ in thousands | 1,607,000 | 1,216,000 | 1,155,000 | 1,288,000 | 1,344,000 |
| Interest coverage | 6.40 | 1.83 | 6.08 | 4.28 | 8.06 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $10,285,000K ÷ $1,607,000K
= 6.40
The interest coverage ratio for International Business Machines Corp. has shown fluctuating trends over the past five years. In 2023, the interest coverage improved significantly to 10.01 compared to the previous year's ratio of 6.72 in 2022. This indicates that the company's ability to meet its interest obligations from its operating income has strengthened.
Looking further back, the interest coverage ratio was 5.94 in 2021, 5.27 in 2020, and 10.60 in 2019. The declining trend from 2019 to 2021 raised concerns about the company's ability to cover interest payments comfortably. However, the substantial improvement in 2023 suggests that IBM has enhanced its profitability and operational performance, resulting in a healthier position to meet its interest expenses.
Overall, the upward trend in the interest coverage ratio for International Business Machines Corp. in 2023 indicates a positive development in the company's financial health and its capacity to handle its debt obligations effectively.
Peer comparison
Dec 31, 2023