TE Connectivity Ltd (TEL)
Interest coverage
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 2,796,000 | 2,354,000 | 2,800,000 | 2,440,000 | 590,000 |
| Interest expense | US$ in thousands | 70,000 | 80,000 | 66,000 | 56,000 | 48,000 |
| Interest coverage | 39.94 | 29.42 | 42.42 | 43.57 | 12.29 |
September 30, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $2,796,000K ÷ $70,000K
= 39.94
TE Connectivity Ltd has displayed a consistent and strong interest coverage ratio over the past five years. The interest coverage ratio measures the company's ability to meet its interest obligations with its earnings before interest and taxes (EBIT). The company has shown a steady improvement in its interest coverage ratio from 2020 to 2022, reaching its peak in 2022 at 42.42. This indicates that TE Connectivity has a substantial buffer to cover its interest expenses using its operating income.
In 2023 and 2024, the interest coverage ratio remained high, though slightly lower compared to the peak in 2022. Despite the slight decrease, the company's interest coverage ratio still indicates a strong ability to cover its interest payments comfortably. This continued stability suggests that TE Connectivity's earnings are sufficient to cover its interest expenses without significant strain on its financial resources.
Overall, TE Connectivity Ltd's consistently high interest coverage ratios reflect a sound financial position and the company's ability to manage its debt obligations effectively.
Peer comparison
Sep 30, 2024