International Business Machines (IBM)
Interest coverage
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 10,285,000 | 9,585,000 | 3,122,000 | 2,643,000 | 2,230,000 | 1,805,000 | 7,189,000 | 6,950,000 | 7,020,000 | 5,179,000 | 6,132,000 | 6,318,000 | 5,518,000 | 7,994,000 | 7,798,000 | 9,020,000 | 10,835,000 | 11,783,000 | 13,019,000 | 12,854,000 |
| Interest expense (ttm) | US$ in thousands | 1,607,000 | 1,515,000 | 1,398,000 | 1,272,000 | 1,216,000 | 1,206,000 | 1,201,000 | 1,185,000 | 1,154,000 | 1,168,000 | 1,201,000 | 1,243,000 | 1,289,000 | 1,326,000 | 1,435,000 | 1,460,000 | 1,344,000 | 1,183,000 | 942,000 | 767,000 |
| Interest coverage | 6.40 | 6.33 | 2.23 | 2.08 | 1.83 | 1.50 | 5.99 | 5.86 | 6.08 | 4.43 | 5.11 | 5.08 | 4.28 | 6.03 | 5.43 | 6.18 | 8.06 | 9.96 | 13.82 | 16.76 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $10,285,000K ÷ $1,607,000K
= 6.40
The interest coverage ratio for International Business Machines Corp. has shown a positive trend over the past eight quarters, indicating the company's ability to meet its interest obligations from its operating earnings. The interest coverage ratio has consistently improved from 5.23 in Q3 2022 to 10.01 in Q4 2023, reflecting a strengthening financial position.
This upward trend suggests that IBM's earnings are sufficiently higher than its interest expenses, providing a buffer against potential financial difficulties. The company's interest coverage has surpassed 7 in each of the last four quarters, signaling a healthy financial position and the ability to comfortably service its debt.
Overall, the improving trend in IBM's interest coverage ratio demonstrates the company's solid financial management and the ability to generate earnings to cover its interest obligations.
Peer comparison
Dec 31, 2023
See also:
International Business Machines Interest Coverage (Quarterly Data)