Bath & Body Works Inc. (BBWI)
Interest coverage
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,366,000 | 1,399,000 | 2,069,000 | 1,533,000 | 152,000 |
| Interest expense | US$ in thousands | 345,000 | 348,000 | 388,000 | 432,000 | 370,000 |
| Interest coverage | 3.96 | 4.02 | 5.33 | 3.55 | 0.41 |
February 3, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,366,000K ÷ $345,000K
= 3.96
Based on the interest coverage ratios of Bath & Body Works Inc. over the past five years, the company's ability to meet its interest payment obligations has shown variability. The interest coverage ratio measures the company's ability to cover its interest expenses with its operating income.
The trend in Bath & Body Works' interest coverage ratio indicates that the company's operating income has generally been sufficient to cover its interest payments, with ratios exceeding 1. This implies that the company has had an acceptable level of financial risk in terms of meeting its interest obligations.
However, it is important to note that the interest coverage ratio has fluctuated from year to year. In particular, there was a significant increase in the ratio from 2020 to 2022, indicating an improvement in the company's ability to cover its interest expenses. This suggests that Bath & Body Works has been managing its debt obligations more effectively over the past few years.
Overall, while Bath & Body Works' interest coverage ratio has shown some fluctuations, the general trend indicates that the company has been able to meet its interest payment obligations comfortably with its operating income. This suggests a reasonably healthy financial position in terms of managing its debt and interest costs.
Peer comparison
Feb 3, 2024