Intel Corporation (INTC)

Interest coverage

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	-11,014,000	-8,362,000	834,000	2,204,000	1,654,000	-2,060,000	-2,273,000	-2,479,000	8,261,000	14,239,000	21,315,000	27,989,000	22,300,000	24,608,000	22,807,000	23,054,000	25,707,000	26,247,000	27,872,000	26,610,000
Interest expense (ttm)	US$ in thousands	1,424,000	1,291,000	1,103,000	943,000	878,000	760,000	670,000	565,000	496,000	481,000	511,000	531,000	597,000	611,000	627,000	684,000	629,000	589,000	536,000	485,000
Interest coverage		-7.73	-6.48	0.76	2.34	1.88	-2.71	-3.39	-4.39	16.66	29.60	41.71	52.71	37.35	40.27	36.37	33.70	40.87	44.56	52.00	54.87

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-11,014,000K ÷ $1,424,000K
= -7.73

Interest coverage is a financial ratio that indicates a company's ability to pay interest expenses on its outstanding debt. A higher interest coverage ratio suggests that a company is more capable of meeting its interest obligations.

Based on the data provided for Intel Corporation, we observe fluctuations in the interest coverage ratio over the reported periods. The interest coverage ratio stood at a healthy level of 54.87 as of March 31, 2020, indicating a strong ability to cover interest payments. However, this ratio gradually declined over subsequent quarters, reaching a low of -7.73 by December 31, 2024, indicating a situation where the company's earnings may not be sufficient to cover interest expenses.

The declining trend in the interest coverage ratio from 2020 to 2024 raises concerns about Intel Corporation's ability to service its debt obligations through earnings generated. A negative interest coverage ratio, as seen in some periods, may imply that the company is not generating enough operating income to cover interest expenses.

It is essential for investors and creditors to monitor Intel Corporation's interest coverage ratio closely to assess its financial health and ability to manage debt. A lower interest coverage ratio may indicate an increased risk of default on debt payments, while a higher ratio points to a stronger financial position. Tracking this ratio over time can provide insights into the company's financial stability and risk level associated with its debt obligations.