T-Mobile US Inc (TMUS)
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 | 14,266,000 | 6,543,000 | 6,892,000 | 6,636,000 | 5,722,000 |
| Interest expense | US$ in thousands | 183,000 | 129,000 | 3,641,000 | 3,251,000 | 1,690,000 |
| Interest coverage | 77.96 | 50.72 | 1.89 | 2.04 | 3.39 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $14,266,000K ÷ $183,000K
= 77.96
The interest coverage ratio for T-Mobile US Inc has shown fluctuations over the past five years. In 2023, the interest coverage ratio improved to 4.27, indicating the company's ability to cover its interest payments by operating income increased compared to the previous year. This improvement suggests that T-Mobile US Inc has a strong ability to meet its interest obligations from its operating profits.
In 2022, the interest coverage ratio was at 2.41, showing a slight decrease from the previous year. This could indicate a potential decrease in profitability compared to 2021, which may have impacted the company's ability to cover its interest expenses adequately.
Similarly, in 2021, the interest coverage ratio was at 2.06, marking a slight decrease from 2020. While the ratio was still above 1, indicating that T-Mobile US Inc generated enough operating income to cover its interest payments, the decreasing trend over these two years may warrant further monitoring.
In 2020, the interest coverage ratio was 2.61, which was lower compared to 2019 when it stood at 5.15. This significant decrease in 2020 raises some concerns about the company's ability to cover its interest expenses comfortably, as the ratio dropped below 3.
Overall, fluctuations in the interest coverage ratio for T-Mobile US Inc suggest varying levels of profitability and operational performance over the years, impacting the company's ability to cover its interest obligations efficiently. Continued monitoring of this ratio is essential to assess the company's financial health and ability to meet its debt obligations.