ConAgra Foods Inc (CAG)
Interest coverage
| May 26, 2024 | May 28, 2023 | May 29, 2022 | May 30, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,175,000 | 1,464,200 | 1,587,600 | 2,141,000 | 1,815,600 |
| Interest expense | US$ in thousands | 448,200 | 418,800 | 388,500 | 430,500 | 499,300 |
| Interest coverage | 2.62 | 3.50 | 4.09 | 4.97 | 3.64 |
May 26, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,175,000K ÷ $448,200K
= 2.62
The interest coverage ratio for ConAgra Foods Inc has shown a fluctuating trend over the past five years. In May 2024, the interest coverage ratio was 2.62, indicating that the company generated operating income 2.62 times larger than its interest expenses for that period. This represents a decline from the previous year where the ratio was 3.50.
While the interest coverage ratio has been decreasing since 2021, it is important to note that the current ratio of 2.62 is still above 1, which is considered the minimum threshold for a healthy interest coverage. A ratio above 1 indicates that the company is generating enough operating income to comfortably cover its interest expenses.
However, the decreasing trend in the interest coverage ratio may raise some concerns about the company's ability to meet its interest obligations in the future. It is crucial for ConAgra Foods Inc to monitor its profitability and manage its debt levels effectively to ensure that the interest coverage ratio remains at a sustainable level.
Peer comparison
May 26, 2024