Albertsons Companies (ACI)
Interest coverage
| Feb 28, 2025 | Nov 30, 2024 | Aug 31, 2024 | May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 1,583,300 | 1,607,500 | 1,656,200 | 1,812,400 | 2,038,800 | 2,195,900 | 2,198,200 | 2,301,800 | 2,386,200 | 2,557,400 | 2,616,400 | 2,571,300 | 2,535,500 | 1,774,300 | 1,409,300 | 1,428,800 | 1,666,900 | 1,992,700 | 1,946,100 | 1,976,000 |
| Interest expense (ttm) | US$ in thousands | 459,800 | 467,600 | 474,900 | 483,200 | 758,100 | 740,400 | 708,400 | 686,300 | 404,600 | 421,000 | 448,000 | 467,500 | 481,900 | 487,000 | 491,600 | 510,900 | 538,200 | 565,600 | 604,500 | 653,400 |
| Interest coverage | 3.44 | 3.44 | 3.49 | 3.75 | 2.69 | 2.97 | 3.10 | 3.35 | 5.90 | 6.07 | 5.84 | 5.50 | 5.26 | 3.64 | 2.87 | 2.80 | 3.10 | 3.52 | 3.22 | 3.02 |
February 28, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,583,300K ÷ $459,800K
= 3.44
The interest coverage ratio for Albertsons Companies has exhibited fluctuations over the period from May 31, 2020, through February 28, 2025. Initially, the ratio was at 3.02 in May 2020, indicating that the company's earnings before interest and taxes (EBIT) were approximately three times its interest expenses, reflecting a comfortable coverage level. The ratio experienced a modest increase, reaching a peak of 3.64 in November 2021, which suggests an improvement in the company's ability to service its interest obligations during that period.
Subsequently, a significant increase in the interest coverage ratio occurred, reaching a high of 6.07 in November 2022, indicating a strong capacity to meet interest commitments with earnings. This trend suggests that the company experienced a period of improved operational performance or reductions in interest expenses relative to earnings during late 2022.
However, starting in early 2023, the ratio declined notably to 3.35 in May 2023 and further to 2.97 by November 2023. This downward trend reflects a potential weakening in the company's earnings relative to its interest obligations or an increase in interest expenses, leading to a lower margin of safety in covering interest payments.
Looking forward, projections up to February 2025 show the ratio stabilizing around the 3.4 to 3.75 range, with the latest available indicator in May 2024 at 3.75. Although this suggests some recovery from the lows observed in late 2023, the interest coverage remains below its peak levels from late 2022, indicating ongoing volatility in earnings performance relative to interest obligations.
Overall, the interest coverage ratio demonstrates periods of strengthening capacity to meet interest expenses, punctuated by periods of decline, particularly in early 2023. The current ratios suggest that Albertsons Companies maintains a moderate safety margin in covering its interest obligations, albeit with some fluctuations that merit ongoing monitoring to assess the company's financial stability and operational performance.
Peer comparison
Feb 28, 2025