Telephone and Data Systems Inc (TDS)

Interest coverage

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	-247,000	260,000	206,000	233,000	290,000	332,000	410,000	410,000	422,000	423,000	437,000	446,000	412,000	395,000	343,000	324,000	351,000	360,000	379,000	384,000
Interest expense (ttm)	US$ in thousands	243,000	233,000	217,000	195,000	175,000	158,000	166,000	212,000	232,000	242,000	231,000	183,000	167,000	155,000	154,000	159,000	165,000	171,000	172,000	172,000
Interest coverage		-1.02	1.12	0.95	1.19	1.66	2.10	2.47	1.93	1.82	1.75	1.89	2.44	2.47	2.55	2.23	2.04	2.13	2.11	2.20	2.23

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-247,000K ÷ $243,000K
= -1.02

Telephone And Data Systems, Inc.'s interest coverage has shown a declining trend over the past five quarters. The interest coverage ratio indicates the company's ability to meet its interest obligations from its operating income. A higher ratio is considered more favorable as it implies the company is more capable of servicing its debt.

Looking at the data provided, the interest coverage ratio in Q4 2022 was the highest at 2.29, indicating a strong ability to cover interest expenses. However, the ratio decreased steadily in the following quarters, reaching a low of 1.01 in Q2 2023 before recovering slightly to 1.30 in Q4 2023.

The declining trend in the interest coverage ratio may raise concerns about the company's ability to meet its interest payments using its operating income. Investors and creditors may view a lower ratio as a sign of increased financial risk. It is important for management to closely monitor and address this trend to ensure the company's financial health and stability.