NXP Semiconductors NV (NXPI)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 3,497,000 | 3,790,000 | 3,790,000 | 2,549,000 | 363,000 |
| Interest expense | US$ in thousands | 398,000 | 438,000 | 427,000 | 369,000 | 362,000 |
| Interest coverage | 8.79 | 8.65 | 8.88 | 6.91 | 1.00 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $3,497,000K ÷ $398,000K
= 8.79
The interest coverage ratio for NXP Semiconductors NV has shown significant improvement over the past few years. As of December 31, 2020, the company had an interest coverage ratio of 1.00, indicating that its operating income was just enough to cover its interest expense.
However, there has been a positive trend since then, with the interest coverage ratio increasing to 6.91 as of December 31, 2021, and further improving to 8.88 by December 31, 2022. This signifies that the company's operating income is now able to cover its interest expenses almost 9 times over.
The positive trend continued into 2023 and 2024, with interest coverage ratios of 8.65 and 8.79 respectively. This demonstrates the company's improved ability to meet its interest obligations comfortably, suggesting a stronger financial position and lower risk of default.
Overall, the improving trend in NXP Semiconductors NV's interest coverage ratio indicates a healthier financial position and increased profitability, enhancing investor confidence in the company's ability to meet its debt obligations.
Peer comparison
Dec 31, 2024