Cracker Barrel Old Country Store (CBRL)

Interest coverage

		Aug 2, 2024	Jul 28, 2023	Jul 29, 2022	Jul 30, 2021	Jul 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	45,119	120,617	153,003	366,659	103,611
Interest expense	US$ in thousands	1,752	1,730	9,620	56,108	22,327
Interest coverage		25.75	69.72	15.90	6.53	4.64

August 2, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $45,119K ÷ $1,752K
= 25.75

The interest coverage ratio for Cracker Barrel Old Country Store has shown a positive trend over the past five years. The company's ability to cover interest expenses has significantly improved, with the ratio increasing from 4.64 in 2020 to 25.75 in 2024. This indicates that the company is generating more than enough operating income to cover its interest obligations.

The substantial increase in the interest coverage ratio from 2020 to 2024 reflects the company's improved financial health and ability to manage its debt effectively. A higher interest coverage ratio implies lower financial risk for creditors and investors, as it signifies the company's capacity to meet its interest payments comfortably.

Overall, the upward trend in Cracker Barrel Old Country Store's interest coverage ratio suggests that the company's profitability and operational efficiency have strengthened over the years, contributing to its ability to service its debt obligations with ease.