AutoZone Inc (AZO)

Interest coverage

		Feb 10, 2024	Nov 18, 2023	Aug 26, 2023	May 6, 2023	Feb 11, 2023	Nov 19, 2022	Aug 27, 2022	May 7, 2022	Feb 12, 2022	Nov 20, 2021	Aug 28, 2021	May 8, 2021	Feb 13, 2021	Nov 21, 2020	Aug 29, 2020	May 9, 2020	Nov 23, 2019	Aug 31, 2019	May 4, 2019	Feb 9, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	3,672,827	3,599,562	3,473,991	3,355,301	3,282,490	3,239,273	3,270,725	3,210,945	3,228,780	3,083,787	2,944,527	2,918,537	2,606,705	2,624,961	2,790,511	2,319,994	2,228,341	2,216,136	2,026,600	2,024,842
Interest expense (ttm)	US$ in thousands	108,727	108,727	108,727	63,995	63,995	63,995	107,279	101,403	101,403	101,403	104,298	111,817	111,817	155,560	166,978	101,340	101,340	57,597	54,340	54,340
Interest coverage		33.78	33.11	31.95	52.43	51.29	50.62	30.49	31.67	31.84	30.41	28.23	26.10	23.31	16.87	16.71	22.89	21.99	38.48	37.29	37.26

February 10, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $3,672,827K ÷ $108,727K
= 33.78

The interest coverage ratio for AutoZone Inc has displayed fluctuating trends over the past few years, ranging from highs in the range of 50 to lows around 16. This ratio measures the company's ability to cover its interest expenses with its operating income.

From Feb 10, 2024, to May 9, 2019, the interest coverage ratio remained relatively strong, above 20, indicating that AutoZone Inc had ample earnings to cover its interest payments comfortably. However, the ratio experienced a noticeable decline in the most recent period, reaching 16.71 on Nov 21, 2020, before rebounding slightly.

Overall, AutoZone Inc's interest coverage ratio has shown resilience over the years but may warrant closer monitoring due to the recent downward trend, which could indicate potential challenges in generating sufficient operating income to cover interest expenses.