BJs Wholesale Club Holdings Inc (BJ)

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	800,419	737,986	617,323	642,392	352,199
Interest expense	US$ in thousands	61,177	40,082	49,059	69,020	99,238
Interest coverage		13.08	18.41	12.58	9.31	3.55

February 3, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $800,419K ÷ $61,177K
= 13.08

Based on the interest coverage ratios provided for BJs Wholesale Club Holdings Inc over the past five years, we observe a fluctuating trend. The interest coverage ratio measures a company's ability to cover its interest payments with its operating income.

In 2020, the interest coverage ratio was 3.55, indicating that the company generated enough operating income to cover its interest expenses 3.55 times over. However, this ratio improved significantly in the following years, reaching 9.31 in 2021, 12.58 in 2022, and further improving to 18.41 in 2023.

The most recent data point for February 3, 2024, shows an interest coverage ratio of 13.08, suggesting a strong ability to cover interest payments with operating income. This trend indicates the company's increasing capacity to meet its debt obligations comfortably through its operational earnings.

Overall, the trend in BJs Wholesale Club Holdings Inc's interest coverage ratios reflects a positive trajectory, demonstrating an improving financial health in terms of its ability to service interest payments over the years.