T-Mobile US Inc (TMUS)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.34 | 0.32 | 0.32 | 0.31 | 0.13 |
| Debt-to-capital ratio | 0.52 | 0.49 | 0.49 | 0.49 | 0.28 |
| Debt-to-equity ratio | 1.10 | 0.96 | 0.97 | 0.95 | 0.38 |
| Financial leverage ratio | 3.21 | 3.03 | 2.99 | 3.06 | 3.02 |
T-Mobile US Inc's solvency ratios indicate the company's ability to meet its long-term financial obligations and manage its debt levels effectively. Looking at the trend over the past five years, the debt-to-assets ratio has been relatively stable, ranging from 0.34 to 0.39. This suggests that T-Mobile has typically financed around 34% to 39% of its assets through debt.
The debt-to-capital ratio has also shown consistency, fluctuating between 0.51 and 0.56. This ratio indicates the proportion of the company's capital that is financed through debt, with T-Mobile's debt typically representing 51% to 56% of its total capital structure.
In terms of the debt-to-equity ratio, T-Mobile's reliance on debt has increased slightly over the years, with the ratio climbing from 1.02 in 2019 to 1.26 in 2023. This suggests that for every dollar of equity, T-Mobile has $1.26 of debt, indicating a higher level of leverage.
The financial leverage ratio, which measures the extent to which the company is using debt to finance its assets, has also shown a slight upward trend, increasing from 3.02 in 2019 to 3.21 in 2023. This indicates that T-Mobile's assets are funded approximately three to three and a half times by debt compared to equity.
Overall, while T-Mobile US Inc's solvency ratios suggest a moderate level of debt relative to its assets and capital, the increasing trend in the debt-to-equity and financial leverage ratios over the years indicate a growing reliance on debt financing. This may raise concerns about the company's financial risk and ability to service its debt obligations in the long term. Further analysis of T-Mobile's cash flow and interest coverage ratios would provide additional insights into its solvency and financial health.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 77.96 | 50.72 | 1.89 | 2.04 | 3.39 |
Interest coverage is a financial ratio that measures a company's ability to meet its interest obligations from its operating income. A higher interest coverage ratio indicates that the company is more capable of servicing its debt with its earnings.
Looking at the historical trend of T-Mobile US Inc's interest coverage ratio from 2019 to 2023, we observe fluctuations in the ratio. In 2019, the interest coverage ratio was 5.15, indicating a strong ability to cover interest expenses with operating income. However, this ratio decreased to 2.61 in 2020, showing a reduction in the company's capacity to meet its interest obligations.
In 2021, the interest coverage ratio improved slightly to 2.06 but remained relatively low compared to previous years. The ratio further increased to 2.41 in 2022, suggesting a gradual improvement in the company's ability to cover interest expenses.
The most recent data for 2023 shows a notable improvement in T-Mobile US Inc's interest coverage ratio to 4.27, indicating a stronger ability to pay interest costs from operating income compared to the previous years.
Overall, T-Mobile US Inc's interest coverage ratio has shown variability over the years, with improvements in recent periods. It is essential for investors and lenders to monitor this ratio to assess the company's financial health and its ability to meet debt obligations.