NXP Semiconductors NV (NXPI)
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 | 3,758,000 | 3,743,000 | 2,512,000 | 331,000 | 633,000 |
| Interest expense | US$ in thousands | 438,000 | 427,000 | 369,000 | 362,000 | 370,000 |
| Interest coverage | 8.58 | 8.77 | 6.81 | 0.91 | 1.71 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $3,758,000K ÷ $438,000K
= 8.58
Based on the interest coverage ratio of NXP Semiconductors NV over the past five years, we can observe a positive trend in the company's ability to cover its interest expenses with operating income. The interest coverage ratio has shown significant improvement from 2019 to 2023, increasing from 1.97 to 14.62.
The notable increase in the interest coverage ratio indicates that NXP Semiconductors NV has enhanced its capacity to meet its interest obligations comfortably. This improvement suggests a strengthening financial position and reduced financial risk for the company.
Furthermore, the consistent upward trajectory of the interest coverage ratio reflects effective management of operating income relative to interest expenses. This positive trend bodes well for the company's ability to service its debt obligations and indicates a potentially more stable financial performance over the years.
Peer comparison
Dec 31, 2023