Motorola Solutions Inc (MSI)
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 | 2,390,000 | 1,751,000 | 1,762,000 | 1,403,000 | 1,235,000 |
| Interest expense | US$ in thousands | 249,000 | 240,000 | 215,000 | 233,000 | 237,000 |
| Interest coverage | 9.60 | 7.30 | 8.20 | 6.02 | 5.21 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $2,390,000K ÷ $249,000K
= 9.60
The interest coverage ratio for Motorola Solutions Inc has shown a fluctuating trend over the past five years. In 2023, the interest coverage ratio improved to 10.99 from 7.79 in 2022, indicating that the company's ability to cover its interest expenses with its earnings has strengthened. This signifies that Motorola Solutions generated sufficient operating income to cover its interest payments nearly 11 times in 2023.
Comparing to previous years, the interest coverage ratio was also relatively strong in 2021 and 2019, at 8.28 and 7.44 respectively. Conversely, in 2020, the interest coverage ratio dipped to 6.44, suggesting a temporary decrease in the company's ability to cover its interest obligations from its earnings.
Overall, the gradual improvement in the interest coverage ratio since 2020 indicates that Motorola Solutions Inc has been effectively managing its interest obligations. Investors and creditors may view the company's improving interest coverage ratio favorably as it signifies a lower financial risk and healthier financial stability.
Peer comparison
Dec 31, 2023