NVIDIA Corporation (NVDA)
Interest coverage
| Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Jan 31, 2024 | Jan 28, 2024 | Oct 31, 2023 | Oct 29, 2023 | Jul 31, 2023 | Jul 30, 2023 | Apr 30, 2023 | Jan 31, 2023 | Jan 29, 2023 | Oct 31, 2022 | Oct 30, 2022 | Jul 31, 2022 | May 1, 2022 | Apr 30, 2022 | Jan 31, 2022 | Jan 30, 2022 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 84,273,000 | 73,164,000 | 64,956,000 | 56,266,000 | 49,509,000 | 42,386,000 | 35,263,000 | 26,953,000 | 17,719,000 | 12,025,000 | 5,657,000 | 4,060,000 | 3,248,000 | 3,769,000 | 4,964,000 | 7,212,000 | 9,598,000 | 10,425,000 | 11,006,000 | 10,534,000 |
| Interest expense (ttm) | US$ in thousands | 247,000 | 249,000 | 251,000 | 253,000 | 252,000 | 254,000 | 256,000 | 259,000 | 260,000 | 259,000 | 259,000 | 258,000 | 259,000 | 263,000 | 266,000 | 262,000 | 258,000 | 252,000 | 244,000 | 243,000 |
| Interest coverage | 341.19 | 293.83 | 258.79 | 222.40 | 196.46 | 166.87 | 137.75 | 104.07 | 68.15 | 46.43 | 21.84 | 15.74 | 12.54 | 14.33 | 18.66 | 27.53 | 37.20 | 41.37 | 45.11 | 43.35 |
January 31, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $84,273,000K ÷ $247,000K
= 341.19
NVIDIA Corporation's interest coverage ratio, a measure of the company's ability to pay interest expenses on its outstanding debt, has exhibited significant fluctuations over the last few years. The interest coverage ratio indicates how many times the company can cover its interest payments with its operating income.
In January 2022, the interest coverage ratio stood at 43.35, signaling a strong ability to meet interest obligations, which continued to improve in the subsequent months. However, by July 2022, the ratio dropped to 27.53, which could be a cause for concern as it indicated a slight weakening in the company's ability to cover interest expenses.
The trend continued downward, with the interest coverage ratio decreasing to 12.54 in January 2023, reflecting increased pressure on the company's earnings to cover interest costs. Nevertheless, the ratio began to recover in the following periods, reaching 341.19 by January 2025, signaling a significant improvement in the company's ability to service its debt.
It is important to note that a higher interest coverage ratio is generally preferred as it indicates a strong financial position and lower risk of default. Conversely, a declining interest coverage ratio may suggest financial distress and increased risk for investors and creditors. Overall, monitoring NVIDIA Corporation's interest coverage ratio is crucial in assessing its financial health and debt repayment capacity.
Peer comparison
Jan 31, 2025