B&G Foods Inc (BGS)

Interest coverage

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	80,419	98,628	196,079	276,438	203,836
Interest expense	US$ in thousands	9,354	6,244	5,800	5,400	4,600
Interest coverage		8.60	15.80	33.81	51.19	44.31

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $80,419K ÷ $9,354K
= 8.60

The interest coverage ratio measures a company's ability to meet its interest obligations using its operating income. A higher ratio indicates a stronger ability to cover interest expenses.

Based on the data provided, B&G Foods Inc's interest coverage has been decreasing over the past five years. In 2023, the interest coverage ratio dropped to 8.60, down from 15.80 in 2022, 33.81 in 2021, 51.19 in 2020, and 44.31 in 2019.

This decline in the interest coverage ratio may raise concerns about the company's ability to comfortably meet its interest payments with its current level of operating income. It suggests that B&G Foods Inc may have a higher debt burden relative to its earnings, which could pose risks in terms of financial flexibility and potential default.

Analyzing the trend, it is important for stakeholders to closely monitor the company's financial health, profitability, and debt management strategies moving forward to ensure the sustainability of its operations and financial stability.