ConAgra Foods Inc (CAG)
Interest coverage
| May 31, 2025 | May 31, 2024 | May 26, 2024 | May 31, 2023 | May 28, 2023 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | — | 1,046,400 | 1,175,000 | 1,315,400 | 1,464,200 |
| Interest expense | US$ in thousands | 416,700 | 436,200 | 448,200 | 413,500 | 418,800 |
| Interest coverage | 0.00 | 2.40 | 2.62 | 3.18 | 3.50 |
May 31, 2025 calculation
Interest coverage = EBIT ÷ Interest expense
= $—K ÷ $416,700K
= 0.00
The interest coverage ratios for ConAgra Foods Inc provide a sequential perspective on the company's ability to meet its interest obligations over the specified periods. As of May 28, 2023, the interest coverage ratio stood at 3.50, indicating that the company's earnings before interest and taxes (EBIT) were 3.5 times its interest expenses. This suggests a comfortable margin of safety in fulfilling interest commitments at that time. By May 31, 2023, the ratio declined to 3.18, reflecting a slight decrease in coverage, though it still signifies a relatively sound position in meeting interest obligations.
Moving forward, the data for May 26, 2024, shows a further decline to 2.62, indicating a weakening in the company's capacity to cover interest expenses from its earnings. This trend continues, with the ratio as of May 31, 2024, decreasing to 2.40, reinforcing the notion of diminishing interest coverage capability. Such a reduction may suggest increasing financial stress or changing operational dynamics affecting earnings.
Most notably, by May 31, 2025, the interest coverage ratio reaches 0.00. This indicates that, based on the data provided, the company is not generating sufficient EBIT to cover its interest expenses, implying potential difficulties in fulfilling fixed debt obligations solely from operating earnings. This scenario raises concerns regarding financial health and suggests that the company might need to rely on alternative sources of financing, restructuring, or additional earnings improvement measures to meet debt service requirements.
Overall, the trend demonstrates a decline in interest coverage over the analyzed periods, culminating in a situation where the company's ability to comfortably meet interest payments appears compromised as of the latest date. This progression warrants careful monitoring of operational performance and financial strategy adjustments to prevent potential liquidity or solvency issues.
Peer comparison
May 31, 2025