AT&T Inc (T)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 20,167,000 | 19,109,000 | 23,304,000 | 24,366,000 | 25,329,000 | -973,000 | 1,070,000 | 738,000 | 1,364,000 | 31,006,000 | 31,493,000 | 28,686,000 | 32,352,000 | 10,722,000 | 7,435,000 | 7,331,000 | 3,719,000 | 22,618,000 | 23,784,000 | 26,488,000 |
| Interest expense (ttm) | US$ in thousands | 6,759,000 | 6,824,000 | 6,811,000 | 6,720,000 | 6,704,000 | 6,538,000 | 6,296,000 | 6,190,000 | 6,108,000 | 6,174,000 | 6,381,000 | 6,519,000 | 6,763,000 | 6,833,000 | 7,178,000 | 7,579,000 | 7,727,000 | 8,080,000 | 8,191,000 | 8,299,000 |
| Interest coverage | 2.98 | 2.80 | 3.42 | 3.63 | 3.78 | -0.15 | 0.17 | 0.12 | 0.22 | 5.02 | 4.94 | 4.40 | 4.78 | 1.57 | 1.04 | 0.97 | 0.48 | 2.80 | 2.90 | 3.19 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $20,167,000K ÷ $6,759,000K
= 2.98
The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher ratio indicates that the company is more capable of meeting its interest obligations. Looking at the trend for AT&T Inc's interest coverage ratio from March 31, 2020, to December 31, 2024, we observe fluctuations over the period.
The interest coverage ratio started at a relatively healthy level of 3.19 on March 31, 2020, and declined gradually over the next few quarters, reaching a low point of 0.48 on December 31, 2020. This significant decrease suggests that AT&T Inc's ability to cover its interest expenses was strained during that period.
Subsequently, there was a slight improvement in the interest coverage ratio in the following quarters, signaling a partial recovery. The ratio remained volatile for the next couple of years, with fluctuations but generally staying below ideal levels. Notably, there were a few quarters where the ratio fell into negative territory, indicating that the company's operating income was insufficient to cover its interest payments during those periods.
Towards the end of the period under review, the interest coverage ratio showed a more positive trend, gradually increasing to 2.98 by December 31, 2024. This uptick suggests an improvement in AT&T Inc's ability to service its interest obligations with its operating income.
Overall, the analysis of AT&T Inc's interest coverage ratio indicates periodic challenges in meeting interest payments, but there are signs of recovery and improvement in the company's financial health towards the end of the period. It would be important for investors and stakeholders to continue monitoring this ratio to assess AT&T Inc's ongoing ability to manage its interest expenses effectively.
Peer comparison
Dec 31, 2024