Abercrombie & Fitch Company (ANF)

Interest coverage

		Jan 31, 2025	Feb 3, 2024	Jan 31, 2024	Jan 31, 2023	Jan 28, 2023
Earnings before interest and tax (EBIT)	US$ in thousands	780,754	507,361	518,604	108,305	92,648
Interest expense	US$ in thousands	12,077	30,352	30,352	30,236	30,236
Interest coverage		64.65	16.72	17.09	3.58	3.06

January 31, 2025 calculation

Interest coverage = EBIT ÷ Interest expense
= $780,754K ÷ $12,077K
= 64.65

The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt. A higher interest coverage ratio indicates that the company is more capable of servicing its debt obligations.

Analyzing Abercrombie & Fitch Company's interest coverage ratio over the years, we observe the following trends:
- In January 28, 2023, the interest coverage ratio was 3.06, indicating that the company's operating income was able to cover its interest expenses by approximately 3 times.
- By January 31, 2023, the interest coverage ratio improved to 3.58, reflecting a slight increase in the company's ability to cover its interest payments.
- The ratio significantly improved in January 31, 2024, with a notable increase to 17.09, suggesting a substantial enhancement in the company's ability to handle its interest obligations.
- This improvement was sustained by February 3, 2024, with an interest coverage ratio of 16.72, indicating the company's strong financial position and ability to generate sufficient earnings to cover interest expenses.
- Notably, in January 31, 2025, the interest coverage ratio surged to 64.65, signifying a significant increase and reinforcing the company's robust financial health and improved capacity to meet interest payments.

Overall, the trend in Abercrombie & Fitch Company's interest coverage ratio points towards a commendable enhancement in its ability to service its interest obligations, reflecting positively on the company's financial performance and stability.