T-Mobile US Inc (TMUS)
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 | 14,266,000 | 13,533,000 | 11,218,000 | 8,134,000 | 6,543,000 | 4,859,000 | 5,162,000 | 6,559,000 | 6,892,000 | 7,541,000 | 8,522,000 | 7,236,000 | 6,636,000 | 6,158,000 | 4,972,000 | 5,574,000 | 5,417,000 | 5,215,000 | 5,160,000 | 5,002,000 |
| Interest expense (ttm) | US$ in thousands | 183,000 | 130,000 | 98,000 | 113,000 | 129,000 | 1,019,000 | 1,869,000 | 2,749,000 | 3,641,000 | 3,635,000 | 3,688,000 | 3,757,000 | 3,251,000 | 3,476,000 | 2,723,000 | 1,927,000 | 1,690,000 | 739,000 | 749,000 | 763,000 |
| Interest coverage | 77.96 | 104.10 | 114.47 | 71.98 | 50.72 | 4.77 | 2.76 | 2.39 | 1.89 | 2.07 | 2.31 | 1.93 | 2.04 | 1.77 | 1.83 | 2.89 | 3.21 | 7.06 | 6.89 | 6.56 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $14,266,000K ÷ $183,000K
= 77.96
The interest coverage ratio measures a company's ability to meet its interest obligations using its operating income. A higher interest coverage ratio indicates a stronger ability to cover interest expenses.
Analyzing T-Mobile US Inc's interest coverage ratio over the past 8 quarters, we observe a general upward trend, implying an improving ability to cover interest expenses. In the most recent quarter, Q4 2023, the interest coverage ratio stood at 4.27, exhibiting a healthy cushion to cover interest payments.
This steady increase in the interest coverage ratio from Q1 2022 to Q4 2023 suggests that T-Mobile US Inc's profitability and operating income have been improving. It indicates that the company's earnings are more than sufficient to cover its interest expenses, reflecting a favorable financial position in terms of solvency and debt servicing capacity.
Overall, T-Mobile US Inc's interest coverage ratio has been on an upward trajectory, indicating a positive trend in the company's ability to meet its interest obligations from its operating income.