Telephone and Data Systems Inc (TDS)
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 | -246,000 | 289,000 | 421,000 | 413,000 | 350,000 |
| Interest expense | US$ in thousands | 244,000 | 174,000 | 232,000 | 168,000 | 165,000 |
| Interest coverage | -1.01 | 1.66 | 1.81 | 2.46 | 2.12 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $-246,000K ÷ $244,000K
= -1.01
Telephone And Data Systems, Inc.'s interest coverage ratio has shown a declining trend over the past five years. The interest coverage ratio measures the company's ability to pay its interest expenses with its operating income. A higher ratio is generally preferred as it indicates the company is more capable of meeting its interest obligations.
In 2023, the interest coverage ratio was 1.30, which implies that the company's operating income was only sufficient to cover its interest expenses 1.30 times over. This represents a decrease from the previous years, indicating a potential decrease in the company's ability to cover its interest payments from its operating income.
The declining trend in the interest coverage ratio could raise concerns about Telephone And Data Systems, Inc.'s financial health and ability to meet its debt obligations. It suggests that the company may be becoming less profitable or facing increased interest expenses relative to its operating income. In turn, this could raise questions about the company's overall financial stability and ability to manage its debt obligations effectively.
Peer comparison
Dec 31, 2023