ConAgra Foods Inc (CAG)
Interest coverage
| May 31, 2024 | May 26, 2024 | May 31, 2023 | May 28, 2023 | May 31, 2022 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,046,400 | 1,175,000 | 1,315,400 | 1,464,200 | 1,560,700 |
| Interest expense | US$ in thousands | 436,200 | 448,200 | 413,500 | 418,800 | 382,000 |
| Interest coverage | 2.40 | 2.62 | 3.18 | 3.50 | 4.09 |
May 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,046,400K ÷ $436,200K
= 2.40
The interest coverage ratio for ConAgra Foods Inc has been on a declining trend over the past few years. As of May 31, 2022, the interest coverage ratio stood at 4.09, indicating that the company's operating income was sufficient to cover its interest expenses over four times. However, this ratio decreased to 3.50 by May 28, 2023, and further declined to 3.18 by May 31, 2023. The trend continued with the interest coverage ratio dropping to 2.62 by May 26, 2024, and further to 2.40 by May 31, 2024.
These decreasing values suggest that ConAgra Foods Inc may be experiencing challenges in generating enough operating income to cover its interest expenses comfortably. A lower interest coverage ratio indicates a higher financial risk as the company may struggle to meet its interest obligations in the future. It is essential for the company to closely monitor and address this trend to ensure its financial health and stability.
Peer comparison
May 31, 2024