AT&T Inc (T)
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 | 25,329,000 | 1,364,000 | 32,192,000 | 3,719,000 | 25,818,000 |
| Interest expense | US$ in thousands | 6,704,000 | 6,108,000 | 6,716,000 | 7,727,000 | 8,422,000 |
| Interest coverage | 3.78 | 0.22 | 4.79 | 0.48 | 3.07 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $25,329,000K ÷ $6,704,000K
= 3.78
AT&T, Inc.'s interest coverage ratio has shown a generally positive trend over the past five years, indicating the company's ability to meet its interest obligations comfortably. The interest coverage ratio measures a company's ability to pay its interest expenses on outstanding debt and is calculated by dividing earnings before interest and taxes (EBIT) by the interest expense.
From 2019 to 2023, AT&T's interest coverage ratio has fluctuated within a range of 3.20 to 4.20. The highest interest coverage ratio was recorded in 2021 at 4.20, indicating that the company generated sufficient EBIT to cover its interest expenses over four times.
A higher interest coverage ratio suggests that the company is better positioned to pay off its interest obligations, as seen in AT&T's ratios above 3.00 in each year. Despite some fluctuations, the consistency of maintaining ratios above 3.00 over the years speaks to AT&T's ability to manage its debt effectively.
Overall, the trend in AT&T, Inc.'s interest coverage ratio reflects a reasonably stable financial position with the company having a sufficient buffer to cover its interest expenses, which is a positive indicator for investors and creditors.
Peer comparison
Dec 31, 2023