Microsoft Corporation (MSFT)

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	103,622,000	97,016,000	91,279,000	87,053,000	84,577,000	86,788,000	85,779,000	84,754,000	81,930,000	77,798,000	73,448,000	67,598,000	63,186,000	59,017,000	55,627,000	54,784,000	52,484,000	48,802,000	46,374,000	44,461,000
Interest expense (ttm)	US$ in thousands	2,412,000	1,993,000	1,968,000	1,982,000	1,989,000	2,024,000	2,063,000	2,120,000	2,250,000	2,296,000	2,346,000	2,479,000	2,460,000	2,543,000	2,591,000	2,574,000	2,631,000	2,649,000	2,686,000	2,689,000
Interest coverage		42.96	48.68	46.38	43.92	42.52	42.88	41.58	39.98	36.41	33.88	31.31	27.27	25.69	23.21	21.47	21.28	19.95	18.42	17.27	16.53

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $103,622,000K ÷ $2,412,000K
= 42.96

The interest coverage ratio measures a company's ability to meet its interest obligations using its operating income. Microsoft Corporation's interest coverage ratio has remained consistently strong over the past eight quarters, averaging around 42. This indicates that Microsoft has ample operating income to cover its interest expenses, demonstrating financial stability and ability to comfortably service its debt. The upward trend in the interest coverage ratio over this period suggests an improving ability to meet interest obligations, enhancing investor confidence in the company's financial health.