Aramark Holdings (ARMK)

Interest coverage

		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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	830,249	862,926	783,252	727,756	687,764	628,365	562,468	488,828	352,183	191,469	-34,795	-436,638	-539,660	-264,900	35,163	551,579	772,090	891,159	964,897	962,742
Interest expense (ttm)	US$ in thousands	452,643	439,032	434,925	413,644	389,467	381,533	367,132	387,381	393,974	401,366	693,865	583,506	488,552	389,434	89,583	170,447	253,301	334,988	340,707	349,752
Interest coverage		1.83	1.97	1.80	1.76	1.77	1.65	1.53	1.26	0.89	0.48	-0.05	-0.75	-1.10	-0.68	0.39	3.24	3.05	2.66	2.83	2.75

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $830,249K ÷ $452,643K
= 1.83

The interest coverage ratio for Aramark Holdings fluctuated over the analyzed periods, ranging from negative values to positive values. The ratio indicates the company's ability to cover its interest expenses with its earnings before interest and taxes (EBIT). A higher interest coverage ratio suggests that the company is more capable of meeting its interest obligations.

From December 2019 to March 2021, Aramark Holdings had declining interest coverage ratios, indicating a deterioration in its ability to meet interest payments out of its earnings. The company experienced a notable decline in its ratio, reaching negative values in the June 2021 and September 2021 periods, signifying difficulties in meeting its interest obligations with operating profits.

However, there was a positive trend from September 2021 to September 2023, with the interest coverage ratio gradually improving. This positive trend suggests that Aramark Holdings has been better positioned to cover its interest expenses in more recent periods. Notably, the company achieved its highest interest coverage ratio of 1.97 in September 2023, indicating a considerable improvement in its ability to service its interest payments.

Overall, the analysis of the interest coverage ratio for Aramark Holdings indicates fluctuations in the company's financial health and its ability to manage its interest payments over the analyzed periods.