Texas Instruments Incorporated (TXN)

Interest coverage

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	5,961,000	6,118,000	6,453,000	7,166,000	7,771,000	8,352,000	9,043,000	9,682,000	10,246,000	10,531,000	10,140,000	9,696,000	9,103,000	8,566,000	7,882,000	6,923,000	6,207,000	5,534,000	5,521,000	5,752,000
Interest expense (ttm)	US$ in thousands	508,000	476,000	443,000	401,000	353,000	315,000	270,000	230,000	214,000	203,000	195,000	190,000	184,000	183,000	187,000	191,000	190,000	187,000	181,000	177,000
Interest coverage		11.73	12.85	14.57	17.87	22.01	26.51	33.49	42.10	47.88	51.88	52.00	51.03	49.47	46.81	42.15	36.25	32.67	29.59	30.50	32.50

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $5,961,000K ÷ $508,000K
= 11.73

Based on the provided data, the interest coverage ratio of Texas Instruments Incorporated has shown a generally declining trend over the analyzed period from March 31, 2020, to December 31, 2024. The interest coverage ratio measures a company's ability to meet its interest obligations with its earnings before interest and taxes (EBIT).

At the beginning of the period in March 31, 2020, the interest coverage ratio stood at a robust 32.50, indicating that Texas Instruments had comfortable earnings to cover its interest expenses. However, this ratio gradually decreased over time, reaching a low of 11.73 by December 31, 2024.

The declining trend in the interest coverage ratio suggests that the company's ability to cover its interest expenses with operating earnings has weakened. A lower interest coverage ratio may indicate increasing financial risk for the company, as it implies a higher dependency on earnings to fulfill interest obligations.

It is important for investors and stakeholders to closely monitor Texas Instruments' interest coverage ratio, as a sustained downward trend could signal potential financial challenges in terms of meeting debt obligations. Further analysis of the company's financial health, liquidity, and profitability may be warranted to assess the overall risk profile and sustainability of its operations.