BJs Wholesale Club Holdings Inc (BJ)

Interest coverage

		Jan 31, 2025	Feb 3, 2024	Jan 31, 2024	Jan 31, 2023	Jan 28, 2023
Earnings before interest and tax (EBIT)	US$ in thousands	770,396	800,419	799,258	750,310	737,986
Interest expense	US$ in thousands	51,359	61,177	63,366	47,462	40,082
Interest coverage		15.00	13.08	12.61	15.81	18.41

January 31, 2025 calculation

Interest coverage = EBIT ÷ Interest expense
= $770,396K ÷ $51,359K
= 15.00

Interest coverage is a key financial ratio that measures a company's ability to pay its interest obligations on outstanding debt. A higher ratio indicates that the company is more capable of servicing its debt.

Based on the data provided for BJs Wholesale Club Holdings Inc, the interest coverage ratio has exhibited some fluctuations over the years. In January 28, 2023, the interest coverage ratio was 18.41, indicating the company's strong ability to cover its interest payments. However, this ratio decreased to 15.81 by January 31, 2023, showing a slight decline in the company's capacity to meet its interest obligations.

Subsequently, in January 31, 2024, the interest coverage ratio further decreased to 12.61, suggesting a potentially greater strain on the company's ability to cover interest expenses. However, in February 3, 2024, the ratio improved to 13.08, indicating a slight recovery in the company's ability to manage its interest payments.

By January 31, 2025, the interest coverage ratio increased to 15.00, showing a positive trend towards a more robust ability to cover interest expenses.

In conclusion, despite some fluctuations, BJs Wholesale Club Holdings Inc has generally maintained a healthy interest coverage ratio over the years, indicating a reasonable ability to meet its interest payment obligations. Nevertheless, it is advisable for the company to monitor its interest coverage ratio closely to ensure it remains at a sustainable level.