Qualcomm Incorporated (QCOM)

Interest coverage

		Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	8,030,000	15,438,000	10,833,000	6,321,000	8,108,000
Interest expense	US$ in thousands	694,000	490,000	559,000	602,000	627,000
Interest coverage		11.57	31.51	19.38	10.50	12.93

September 30, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $8,030,000K ÷ $694,000K
= 11.57

Qualcomm Incorporated's interest coverage ratio has fluctuated over the past five years. The interest coverage ratio measures the company's ability to meet its interest payments on outstanding debt obligations. A higher interest coverage ratio indicates a better ability to meet interest expenses.

In the most recent fiscal year ending September 30, 2023, Qualcomm's interest coverage ratio was 11.57. This represents a decline compared to the previous year, where it was significantly higher at 31.51 in September 2022. Despite the decrease, the interest coverage ratio of 11.57 still indicates that Qualcomm generated enough earnings to cover its interest expenses more than 11 times over in the fiscal year 2023.

Looking back at the trend over the past five years, Qualcomm's interest coverage ratio has shown variability. It was 19.38 in 2021, 10.50 in 2020, and 12.93 in 2019. The decline in the interest coverage ratio in 2023 compared to the peak in 2022 may warrant further investigation to understand the factors contributing to this shift.

Overall, while Qualcomm's interest coverage ratio has experienced fluctuations, it remains at a level that demonstrates the company's ability to comfortably meet its interest obligations. However, investors and stakeholders may want to monitor the trend in the interest coverage ratio to assess Qualcomm's financial health and debt servicing capacity.