Chewy Inc (CHWY)
Interest coverage
| Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Feb 2, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 51,812 | 54,452 | -71,655 | -90,318 | -252,726 |
| Interest expense | US$ in thousands | 3,582 | 2,574 | 2,162 | 2,168 | 356 |
| Interest coverage | 14.46 | 21.15 | -33.14 | -41.66 | -709.90 |
January 28, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $51,812K ÷ $3,582K
= 14.46
The interest coverage ratio for Chewy Inc has shown significant fluctuations over the past five years. In January 2024, the interest coverage ratio stood at 14.46, indicating that the company's operating income was 14.46 times higher than its interest expenses for that period. This suggests that Chewy Inc has a strong ability to meet its interest obligations using its operating profits.
In contrast, the interest coverage ratios for January 2023 and January 2022 were 21.15 and -33.14, respectively. A ratio of 21.15 in January 2023 indicates an even stronger ability to cover interest expenses compared to January 2024. However, the ratio of -33.14 in January 2022 signifies that the company's operating income was not sufficient to cover its interest expenses, potentially raising concerns about Chewy Inc's financial health and ability to meet its debt obligations.
Furthermore, the interest coverage ratios for January 2021 and February 2020 were -41.66 and -709.90, respectively. Both figures indicate that Chewy Inc's operating income was significantly insufficient to cover its interest expenses during those periods, suggesting potential financial distress and heightened risk for creditors.
Overall, the trend in Chewy Inc's interest coverage ratio indicates fluctuations in the company's ability to cover interest expenses with operating income over the past five years. It is essential for investors and stakeholders to closely monitor this ratio to assess Chewy Inc's financial stability and its ability to service its debt obligations effectively.
Peer comparison
Jan 28, 2024