T-Mobile US Inc (TMUS)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 18,010,000 | 14,266,000 | 6,543,000 | 6,892,000 | 6,636,000 |
| Interest expense | US$ in thousands | 34,000 | 183,000 | 129,000 | 3,641,000 | 3,251,000 |
| Interest coverage | 529.71 | 77.96 | 50.72 | 1.89 | 2.04 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $18,010,000K ÷ $34,000K
= 529.71
The interest coverage ratio of T-Mobile US Inc has shown a fluctuating trend over the years. As of December 31, 2020, the interest coverage ratio was 2.04, indicating that the company's operating income could cover its interest expenses approximately two times. By December 31, 2021, the ratio slightly decreased to 1.89, implying a slight decrease in the company's ability to cover its interest costs.
However, there was a significant improvement in the interest coverage ratio by December 31, 2022, where it surged to 50.72, reflecting a substantial increase in T-Mobile US Inc's ability to cover its interest expenses with its operating income. This positive trend continued in the following years, with the ratios climbing to 77.96 by December 31, 2023, and a remarkable 529.71 by December 31, 2024. These later ratios indicate a robust financial position and a very healthy ability to meet interest obligations.
Overall, the upward trend in the interest coverage ratios from 2022 to 2024 suggests that T-Mobile US Inc has significantly strengthened its capacity to service its interest expenses, which could signify improved financial health and sustainability.