Micron Technology Inc (MU)
Interest coverage
| Aug 29, 2024 | Aug 31, 2023 | Sep 1, 2022 | Sep 2, 2021 | Sep 3, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,304,000 | -5,268,000 | 9,764,000 | 6,438,000 | 3,161,000 |
| Interest expense | US$ in thousands | 225,000 | 388,000 | 189,000 | 183,000 | 194,000 |
| Interest coverage | 5.80 | -13.58 | 51.66 | 35.18 | 16.29 |
August 29, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,304,000K ÷ $225,000K
= 5.80
Interest coverage is a key financial ratio that indicates a company's ability to pay its interest expenses with its operating income. A higher interest coverage ratio signifies a greater ability to meet interest obligations.
Analyzing the interest coverage ratio of Micron Technology Inc over the past five years, we observe fluctuations in the company's ability to cover its interest expenses. In 2024, the interest coverage ratio improved to 5.80, indicating the company's operating income was nearly 6 times its interest expenses. This suggests a healthier financial position compared to the previous year when the ratio was negative, indicating that operating income was insufficient to cover interest payments.
Looking further back, in 2022 and 2021, Micron demonstrated strong interest coverage ratios of 51.66 and 35.18, respectively, indicating a robust ability to meet interest obligations. The ratio decreased in 2020 to 16.29, but still demonstrated a satisfactory level of interest coverage.
Overall, the trend in Micron Technology Inc's interest coverage ratio shows variability, with periods of both strong and weaker performance. It is important for investors and stakeholders to monitor this ratio over time to assess the company's financial stability and ability to service its debt obligations.
Peer comparison
Aug 29, 2024