Tesla Inc (TSLA)
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 | 10,152,000 | 13,879,000 | 6,589,000 | 1,761,000 | -67,000 |
| Interest expense | US$ in thousands | 156,000 | 191,000 | 371,000 | 748,000 | 685,000 |
| Interest coverage | 65.08 | 72.66 | 17.76 | 2.35 | -0.10 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $10,152,000K ÷ $156,000K
= 65.08
The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt. It is calculated by dividing the earnings before interest and taxes (EBIT) by the interest expense. Looking at the historical trend for Tesla Inc, we observe significant improvement in its interest coverage over the past five years. In 2019, the interest coverage ratio was a mere 0.12, indicating a lower ability to cover interest expenses. However, this ratio substantially increased to 2.78 in 2020 and further rose to 15.97 in 2021, reflecting a significant enhancement in the company's capacity to cover its interest obligations. Notably, the absence of data for 2022 and 2023 limits our ability to analyze the most recent performance. The positive trend witnessed in the earlier years signifies an improvement in Tesla's financial position and suggests a strengthened ability to service its debt obligations.
Peer comparison
Dec 31, 2023