Best Buy Co. Inc (BBY)
Interest coverage
| Feb 3, 2024 | Oct 28, 2023 | Jul 29, 2023 | Apr 29, 2023 | Jan 28, 2023 | Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | May 1, 2021 | Jan 30, 2021 | Oct 31, 2020 | Aug 1, 2020 | May 2, 2020 | Feb 1, 2020 | Nov 2, 2019 | Aug 3, 2019 | May 4, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 1,674,000 | 1,701,000 | 1,709,000 | 1,698,000 | 1,824,000 | 2,003,000 | 2,304,000 | 2,737,000 | 3,053,000 | 3,301,000 | 3,195,000 | 2,967,000 | 2,429,000 | 2,358,000 | 2,197,000 | 1,944,000 | 2,057,000 | 2,068,000 | 2,008,000 | 2,033,000 |
| Interest expense (ttm) | US$ in thousands | 52,000 | 50,000 | 46,000 | 41,000 | 35,000 | 29,000 | 26,000 | 25,000 | 25,000 | 28,000 | 32,000 | 41,000 | 52,000 | 57,000 | 62,000 | 63,000 | 64,000 | 70,000 | 69,000 | 72,000 |
| Interest coverage | 32.19 | 34.02 | 37.15 | 41.41 | 52.11 | 69.07 | 88.62 | 109.48 | 122.12 | 117.89 | 99.84 | 72.37 | 46.71 | 41.37 | 35.44 | 30.86 | 32.14 | 29.54 | 29.10 | 28.24 |
February 3, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,674,000K ÷ $52,000K
= 32.19
The interest coverage ratio of Best Buy Co. Inc has shown a generally increasing trend over the past few years, indicating the company's improving ability to meet its interest obligations with its operating income. The ratio has been consistently above 20, which is considered a healthy level and indicative of a low risk of default on interest payments.
The highest interest coverage ratio was recorded in July 2022 at 122.12, suggesting a robust ability to cover interest expenses with operating earnings during that period. This demonstrates a strong financial position and efficient cost management by the company.
Despite some fluctuations in the ratio over the reporting periods, the overall trend has been positive, with the company's interest coverage ratio trending upwards. This indicates that Best Buy Co. Inc has been successful in generating sufficient earnings before interest and taxes to comfortably meet its interest payment obligations. Investors and creditors may view this trend positively as it reflects the company's financial stability and capacity to service its debt effectively.