AT&T Inc (T)

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	19,049,000	25,329,000	1,364,000	32,192,000	3,719,000
Interest expense	US$ in thousands	7,120,000	6,704,000	6,108,000	6,716,000	7,727,000
Interest coverage		2.68	3.78	0.22	4.79	0.48

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $19,049,000K ÷ $7,120,000K
= 2.68

The interest coverage ratio for AT&T Inc has shown fluctuations over the years. In December 2020, the interest coverage was notably low at 0.48, indicating that the company's earnings before interest and taxes (EBIT) were only sufficient to cover half of its interest expenses. There was a significant improvement in December 2021, with the ratio increasing to 4.79, suggesting a better ability to meet interest obligations.

However, there was a sharp decline in December 2022, with the interest coverage dropping to 0.22, signaling a potential strain on AT&T's ability to cover its interest expenses with its operating income. The ratio rebounded in December 2023 to 3.78, showing a partial recovery in the company's ability to service its debts.

In December 2024, the interest coverage ratio settled at 2.68, indicating that AT&T Inc continued to generate sufficient earnings to cover its interest payments, although not as comfortably as in 2021. Overall, the trend in interest coverage reveals variability in AT&T's ability to manage its interest expenses, highlighting the importance of monitoring the company's financial performance and debt servicing capacity.