Texas Instruments Incorporated (TXN)

Solvency ratios

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
Debt-to-assets ratio 0.33 0.35 0.35 0.33 0.30 0.29 0.27 0.29 0.29 0.31 0.28 0.32 0.32 0.34 0.36 0.32 0.29 0.29 0.26 0.29
Debt-to-capital ratio 0.39 0.40 0.41 0.39 0.36 0.34 0.32 0.34 0.35 0.37 0.34 0.38 0.40 0.43 0.45 0.42 0.37 0.37 0.35 0.37
Debt-to-equity ratio 0.63 0.66 0.69 0.63 0.56 0.51 0.48 0.52 0.54 0.60 0.52 0.61 0.68 0.75 0.82 0.71 0.60 0.59 0.54 0.59
Financial leverage ratio 1.91 1.90 1.94 1.92 1.87 1.80 1.75 1.80 1.85 1.92 1.85 1.93 2.11 2.19 2.28 2.23 2.02 2.00 2.05 2.05

Texas Instruments Inc.'s solvency ratios provide insights into the company's ability to meet its long-term financial obligations. The debt-to-assets ratio has been relatively stable, ranging between 0.32 and 0.36 over the past eight quarters, indicating that around 32% to 36% of the company's assets are financed by debt.

The debt-to-capital ratio also shows consistency, hovering around 0.37 to 0.41 during the same period. This ratio suggests that debt accounts for approximately 37% to 41% of Texas Instruments Inc.'s capital structure.

The debt-to-equity ratio has shown a slightly increasing trend, fluctuating between 0.51 and 0.70. This indicates that the proportion of debt in relation to equity has been on the rise, with the latest quarter showing a higher reliance on debt financing compared to equity.

The financial leverage ratio, which measures the proportion of assets financed by debt to equity, has increased from 1.75 to 1.94 over the past two years. This suggests that the company's assets are increasingly being funded by debt rather than equity, indicating higher financial risk.

Overall, while Texas Instruments Inc. has maintained relatively stable debt-to-assets and debt-to-capital ratios, the increasing trend in the debt-to-equity ratio and financial leverage ratio may imply a growing financial risk and leverage in the company's capital structure. Investors and stakeholders should closely monitor these ratios for any signs of potential financial distress.

Coverage ratios

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
Interest coverage 20.77 25.31 32.44 41.35 47.38 51.56 51.76 50.44 48.70 45.19 40.50 34.50 31.02 28.50 29.34 31.57 33.66 37.20 41.16 46.74

Interest coverage is a key financial ratio used to assess a company's ability to meet its interest payment obligations. It is calculated by dividing a company's earnings before interest and taxes (EBIT) by its interest expenses. A higher interest coverage ratio indicates that the company is more capable of servicing its debt.

Texas Instruments Inc.'s interest coverage has exhibited a consistently strong performance over the past eight quarters. The interest coverage ratio has been progressively increasing from 20.77 in Q4 2023 to 51.57 in Q1 2022. This upward trend indicates that the company's earnings are substantially exceeding its interest expenses, providing a comfortable buffer to meet its debt obligations.

The latest interest coverage ratio of 42.18 in Q1 2023 is a positive sign for Texas Instruments Inc., demonstrating a healthy financial position and strong profitability. With a ratio well above 1, indicating that the company's EBIT is more than sufficient to cover its interest expenses, Texas Instruments Inc. appears to have a robust capacity to service its debt and manage financial risks effectively.

Overall, the consistently high interest coverage ratios of Texas Instruments Inc. reflect a stable and financially sound operation, suggesting a lower risk of default on its debt obligations and a strong ability to withstand economic challenges.

See also:

Texas Instruments Incorporated Solvency Ratios (Quarterly Data)