Analysis of Solvency Ratios
Quarterly Data
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
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- Income Statement
- Statement of Comprehensive Income
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Liquidity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Reportable Segments
- Selected Financial Data since 2010
- Net Profit Margin since 2010
- Operating Profit Margin since 2010
- Analysis of Revenues
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Solvency Ratios (Summary)
Tesla Inc., solvency ratios (quarterly data)
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
- Debt to Equity
- The debt to equity ratio exhibits a consistent downward trajectory from 1.6 in March 2020 to 0.08 in June 2023, indicating a significant reduction in leverage relative to equity. After this low point, some minor fluctuations are observed, with the ratio increasing to 0.1 in Q3 2023, decreasing again and then slightly rising to 0.12 in Q3 2024 before stabilizing around 0.09 to 0.1 towards mid-2025. This pattern suggests a cautious management of capital structure with an emphasis on lowering debt compared to shareholder equity.
- Debt to Capital
- This ratio follows a similar declining trend, falling from 0.62 in March 2020 to a low of 0.06 in June 2023. Subsequent quarters show slight fluctuations, with values oscillating between 0.06 and 0.1, eventually settling around 0.09 by mid-2025. The downward movement suggests a strategic reduction in reliance on debt financing relative to total capital employed.
- Debt to Assets
- The debt to assets ratio decreases steadily from 0.39 in early 2020 to 0.04 in mid-2023, reflecting a reduced proportion of debt financing on a total asset basis. Some quarterly variability appears afterward, reaching approximately 0.07 in Q3 2024 before declining again to about 0.06 in mid-2025. This trend indicates improved asset funding stability with less leverage over time.
- Financial Leverage
- Financial leverage, measured by the ratio of total assets to equity, declines from a high of 4.06 in March 2020 to roughly 1.77 by June 2023, signaling decreased use of debt against equity. From mid-2023 onwards, the ratio remains relatively stable, fluctuating marginally between 1.66 and 1.76 until mid-2025, suggesting consistent capitalization levels with moderate leverage exposure.
- Interest Coverage
- Data for interest coverage commence in September 2020 at 2.54, followed by a strong upward trend reaching an exceptional 94.4 by September 2023. This increase indicates a substantial improvement in the ability to service interest expenses from operating earnings. Post peak, values decline gradually but remain robust through mid-2025, evidencing sustained strong earnings relative to interest obligations.
Debt Ratios
Coverage Ratios
Debt to Equity
Tesla Inc., debt to equity calculation (quarterly data)
| Jun 30, 2025 | Mar 31, 2025 | 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 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Current portion of debt and finance leases | |||||||||||||||||||||||||||||
| Debt and finance leases, net of current portion | |||||||||||||||||||||||||||||
| Total debt | |||||||||||||||||||||||||||||
| Stockholders’ equity | |||||||||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||||||||
| Debt to equity1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Debt to Equity, Competitors2 | |||||||||||||||||||||||||||||
| Ford Motor Co. | |||||||||||||||||||||||||||||
| General Motors Co. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q2 2025 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total debt
- The total debt exhibited a general downward trend from March 2020 through June 2023, declining from 14,671 million USD to 3,357 million USD. However, starting in September 2023, there was a noticeable increase in total debt, rising sharply to 5,287 million USD and fluctuating thereafter but remaining above 5,000 million USD through the subsequent quarters. This suggests a shift toward assuming more debt obligations in the most recent periods after several years of reduction.
- Stockholders’ equity
- Stockholders’ equity consistently increased across the entire timeline, starting at 9,173 million USD in March 2020 and reaching 77,314 million USD by June 2025. The growth was steady and accelerating in later years, with more pronounced increments after mid-2023. This indicates strong equity expansion, reflecting either retained earnings, capital infusion, or asset revaluation contributing positively to the company’s net worth.
- Debt to equity ratio
- The debt-to-equity ratio showed a marked decline from 1.6 in March 2020 to a low of approximately 0.07 in June 2023, indicating a significant improvement in the company’s leverage position and a reduction in financial risk relative to equity. After June 2023, the ratio experienced a slight increase, fluctuating between 0.08 and 0.12 through June 2025, aligning with the recent uptick in total debt. Nonetheless, the ratio remained substantially lower than the initial level observed in early 2020, signifying a generally conservative approach to debt relative to equity over the period analyzed.
Debt to Capital
Tesla Inc., debt to capital calculation (quarterly data)
| Jun 30, 2025 | Mar 31, 2025 | 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 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Current portion of debt and finance leases | |||||||||||||||||||||||||||||
| Debt and finance leases, net of current portion | |||||||||||||||||||||||||||||
| Total debt | |||||||||||||||||||||||||||||
| Stockholders’ equity | |||||||||||||||||||||||||||||
| Total capital | |||||||||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||||||||
| Debt to capital1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Debt to Capital, Competitors2 | |||||||||||||||||||||||||||||
| Ford Motor Co. | |||||||||||||||||||||||||||||
| General Motors Co. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q2 2025 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
2 Click competitor name to see calculations.
The data demonstrates the evolution of total debt, total capital, and the debt-to-capital ratio over multiple quarterly periods from the first quarter of 2020 through the second quarter of 2025.
- Total Debt
- Total debt shows a notable downtrend from $14,671 million in Q1 2020 to $3,357 million in Q2 2023. This reduction continues up to Q2 2023, indicating a focus on deleveraging or debt repayment strategies within this timeframe. After mid-2023, however, there is a reversal as total debt begins to increase again, reaching $7,220 million by Q2 2025. This rising trend in the later periods suggests new borrowing or increased leverage after a period of sustained reduction.
- Total Capital
- Total capital exhibits a consistent upward trajectory throughout the entire duration, growing from $23,844 million in Q1 2020 to $84,534 million in Q2 2025. The steady increase in total capital indicates successful capital formation or retained earnings contributing to the company’s financial base. Growth appears especially pronounced after Q4 2022, accelerating towards the latest quarters, reflecting possible growth investments or equity issuance.
- Debt to Capital Ratio
- The debt-to-capital ratio shows a substantial decrease, moving from 0.62 in Q1 2020 to a low of 0.06–0.07 range around Q2 2023, highlighting improved financial leverage and a strengthening balance sheet. Following this low, the ratio slightly increases and stabilizes around 0.09 to 0.10 from Q3 2023 onwards, which corresponds with the uptick in total debt. Despite the increase, the ratio remains significantly lower than earlier periods, indicating that debt forms a smaller proportion of total capital than at the start of the period.
In summary, the overall financial pattern suggests an initial strategic reduction of debt combined with steady capital growth, considerably strengthening the company’s capital structure. The recent increase in debt and corresponding slight rise in the debt-to-capital ratio points to a possible change in financial policy or financing needs starting after mid-2023, although leverage remains low relative to earlier periods.
Debt to Assets
Tesla Inc., debt to assets calculation (quarterly data)
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Current portion of debt and finance leases | |||||||||||||||||||||||||||||
| Debt and finance leases, net of current portion | |||||||||||||||||||||||||||||
| Total debt | |||||||||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||||||||
| Debt to assets1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Debt to Assets, Competitors2 | |||||||||||||||||||||||||||||
| Ford Motor Co. | |||||||||||||||||||||||||||||
| General Motors Co. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q2 2025 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt exhibits a clear downward trend from March 31, 2020, through June 30, 2023, declining from $14,671 million to $3,357 million. This represents a substantial reduction in leverage over this period. However, starting from September 30, 2023, total debt reverses this trend, increasing again and peaking at $8,213 million on September 30, 2024, before slightly declining again to $7,220 million by June 30, 2025. This indicates a recent strategic shift or increased financing activity after a period of deleveraging.
- Total Assets
- Total assets consistently increased throughout the entire period, rising from $37,250 million in March 2020 to $128,567 million by June 2025. The growth appears steady and persistent, with no significant drops or plateaus, reflecting ongoing expansion and investment in the company's asset base. The rate of asset growth accelerates notably after December 2022, continuing upwards in the subsequent quarters.
- Debt to Assets Ratio
- The debt to assets ratio demonstrates a marked decrease from 0.39 at the beginning of 2020 to a low near 0.04 during mid-2023, indicating significantly reduced financial leverage and improved balance sheet strength relative to asset size. However, similar to total debt, this ratio begins to increase gradually after mid-2023, reaching around 0.07 by September 2024 and then slightly decreasing but stabilizing near 0.06 through mid-2025. Despite the recent increase, the ratio remains well below the levels observed in early 2020, suggesting that the company maintains a conservative leverage position compared to prior years.
- Overall Insights
- The financial data reflect a strategic focus on reducing debt and strengthening the balance sheet from 2020 through mid-2023, accompanied by steady asset growth. The latter half of the timeline shows a change in borrowing behavior with rising debt levels and leverage ratio, though these remain moderate relative to historical data. The continuous increase in total assets indicates sustained business expansion, possibly requiring additional financing reflected in the recent uptick in debt. Monitoring the ongoing leverage trend will be essential to assess future risk and capital structure adjustments.
Financial Leverage
Tesla Inc., financial leverage calculation (quarterly data)
| Jun 30, 2025 | Mar 31, 2025 | 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 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||||||||
| Stockholders’ equity | |||||||||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||||||||
| Financial leverage1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Financial Leverage, Competitors2 | |||||||||||||||||||||||||||||
| Ford Motor Co. | |||||||||||||||||||||||||||||
| General Motors Co. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q2 2025 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
The financial data demonstrates a clear trend of expanding total assets over the periods analyzed. Starting at US$37,250 million at the end of Q1 2020, total assets increased consistently each quarter, reaching US$128,567 million by the end of Q2 2025. This steady growth reflects an ongoing expansion in the company's asset base.
Stockholders' equity also shows a marked upward trajectory. Beginning at US$9,173 million in Q1 2020, equity rose significantly over the time frame to US$77,314 million by Q2 2025. The equity growth mirrors the asset growth, indicating a strengthening in the company's net worth over time.
The financial leverage ratio, calculated as total assets divided by stockholders' equity, exhibits a consistent decline across the reported quarters. Starting from a high of 4.06 in Q1 2020, the leverage ratio falls steadily, reaching 1.66 by Q2 2025. This decreasing trend suggests that the company is increasingly relying on equity rather than debt to finance its assets, which can indicate an improvement in financial stability and a reduction in risk associated with leverage.
- Total Assets
- Consistent quarter-over-quarter growth from US$37.25 billion to US$128.57 billion over approximately five years, reflecting asset base expansion.
- Stockholders’ Equity
- Substantial increase from US$9.17 billion to US$77.31 billion, demonstrating strengthened capital structure and net worth growth.
- Financial Leverage Ratio
- Declined progressively from 4.06 to 1.66, indicating reduced reliance on debt financing and enhanced equity financing, suggesting improved financial robustness.
Overall, the data indicates a company in a phase of significant growth with a strengthening equity base and diminishing leverage, which collectively contribute to an improved financial position and potentially lower financial risk over the analyzed periods.
Interest Coverage
Tesla Inc., interest coverage calculation (quarterly data)
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Net income attributable to common stockholders | |||||||||||||||||||||||||||||
| Add: Net income attributable to noncontrolling interest | |||||||||||||||||||||||||||||
| Add: Income tax expense | |||||||||||||||||||||||||||||
| Add: Interest expense | |||||||||||||||||||||||||||||
| Earnings before interest and tax (EBIT) | |||||||||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||||||||
| Interest coverage1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Interest Coverage, Competitors2 | |||||||||||||||||||||||||||||
| Ford Motor Co. | |||||||||||||||||||||||||||||
| General Motors Co. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q2 2025 Calculation
Interest coverage
= (EBITQ2 2025
+ EBITQ1 2025
+ EBITQ4 2024
+ EBITQ3 2024)
÷ (Interest expenseQ2 2025
+ Interest expenseQ1 2025
+ Interest expenseQ4 2024
+ Interest expenseQ3 2024)
= ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
- Earnings before interest and tax (EBIT)
- The EBIT values show a general upward trend from March 2020 through December 2022, rising from 239 million USD to a peak of 4016 million USD. This indicates strong operational profitability expansion during this period. However, from March 2023 onwards, there is a noticeable decline with fluctuations, dropping to 680 million USD by June 2025. This suggests a period of decreased operational efficiency or increased costs affecting earnings before interest and tax in the later quarters.
- Interest Expense
- Interest expenses demonstrate a generally declining trend from 169 million USD at March 2020 to about 33 million USD at December 2022, indicating reduced borrowing costs or lower debt levels. However, starting in early 2023, the interest expense begins to increase gradually and fluctuates between 29 million USD and 96 million USD in the following quarters through June 2025. This could imply new borrowing or changes in debt conditions impacting the cost of debt finance.
- Interest Coverage Ratio
- The interest coverage ratio, which was unavailable in the initial quarters, shows a rising trend from 2.54 at September 2020 to an impressive peak of 94.4 at September 2023. This indicates a strong ability to cover interest expenses with EBIT during that time frame, pointing to improved financial health and lower risk related to debt servicing. After this peak, the ratio decreases progressively to 21.42 by June 2025, reflecting the combined impact of falling EBIT and rising interest expenses in the most recent periods.
- Summary of Trends
- Overall, the company experienced significant growth in earnings before interest and tax through the end of 2022, accompanied by declining interest expenses, resulting in exceptional interest coverage ratios indicative of strong financial stability. Afterward, a reversal occurs with EBIT declining sharply and interest expenses increasing, causing the interest coverage ratio to fall although still remaining above 20. This suggests a recent deterioration in operational profitability and increased financing costs, raising attention to cash flow and debt management going forward.