InterDigital Inc (IDCC)
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 | 439,512 | 282,443 | 148,691 | 95,888 | 78,952 |
| Interest expense | US$ in thousands | 2,200 | 44,817 | 29,496 | 25,225 | 40,799 |
| Interest coverage | 199.78 | 6.30 | 5.04 | 3.80 | 1.94 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $439,512K ÷ $2,200K
= 199.78
The interest coverage ratio measures a company's ability to pay interest expenses on its outstanding debt obligations. A higher interest coverage ratio indicates a stronger ability to meet interest payments.
Analyzing InterDigital Inc's interest coverage over the years reveals a positive trend. In December 2020, the interest coverage ratio was 1.94, indicating the company's operating income was almost sufficient to cover its interest expenses.
By December 2021, the interest coverage ratio improved to 3.80, suggesting the company's ability to cover its interest payments had strengthened. The ratio continued to increase significantly, reaching 5.04 in December 2022 and 6.30 in December 2023.
The most notable improvement in interest coverage occurred by December 2024, with the ratio soaring to 199.78. This substantial increase reflects a significant enhancement in InterDigital's ability to comfortably cover its interest obligations through its operating income.
Overall, the trend in InterDigital Inc's interest coverage ratio showcases a consistent and notable improvement, indicating a positive financial health and strong ability to handle its debt obligations.
Peer comparison
Dec 31, 2024