Albertsons Companies (ACI)
Interest coverage
| Feb 28, 2025 | Feb 29, 2024 | Feb 28, 2023 | Feb 28, 2022 | Feb 28, 2021 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,599,600 | 2,097,000 | 2,454,600 | 2,448,200 | 1,571,000 |
| Interest expense | US$ in thousands | 469,900 | 508,000 | 404,600 | 481,900 | 538,200 |
| Interest coverage | 3.40 | 4.13 | 6.07 | 5.08 | 2.92 |
February 28, 2025 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,599,600K ÷ $469,900K
= 3.40
The interest coverage ratios for Albertsons Companies over the specified periods demonstrate a trend of improving financial capacity to meet interest obligations from February 28, 2021, to February 28, 2023. Specifically, the ratio increased from 2.92 in 2021 to 5.08 in 2022, indicating a substantial enhancement in the company's ability to cover its interest expenses with its operating earnings. This upward trajectory continued into 2023, with the ratio reaching 6.07, further reflecting strengthened earnings relative to interest costs.
However, subsequent years exhibit a slight decline in the interest coverage ratio. For the fiscal year ending February 29, 2024, the ratio decreases to 4.13, suggesting a reduced but still comfortable margin for interest expense coverage. The ratio further declines to 3.40 by February 28, 2025, signaling a diminution in the company's interest coverage capacity, though it remains above the generally considered critical threshold of 1.5 to 2.0.
Overall, the data indicates that Albertsons Companies experienced a period of significant improvement in its ability to service interest obligations between 2021 and 2023. Nonetheless, the subsequent decline in 2024 and 2025 may warrant ongoing monitoring to assess whether the trend reflects a normalization of earnings or potential challenges in maintaining previous levels of operating performance.
Peer comparison
Feb 28, 2025