Costco Wholesale Corp (COST)
Interest coverage
| Sep 1, 2024 | Sep 3, 2023 | Aug 28, 2022 | Aug 29, 2021 | Aug 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 9,909,000 | 8,647,000 | 7,927,000 | 6,779,000 | 5,470,000 |
| Interest expense | US$ in thousands | 169,000 | 160,000 | 158,000 | 171,000 | 160,000 |
| Interest coverage | 58.63 | 54.04 | 50.17 | 39.64 | 34.19 |
September 1, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $9,909,000K ÷ $169,000K
= 58.63
Costco Wholesale Corp has shown a positive trend in its interest coverage ratio over the past five years, indicating the company's ability to meet its interest obligations. The interest coverage ratio has increased steadily from 34.19 in 2020 to 58.63 in 2024. This improvement reflects Costco's strong earnings relative to its interest expenses, providing a comfortable buffer to cover its interest payments.
The company's interest coverage ratio of 58.63 in 2024 signifies that Costco's operating income is nearly 59 times higher than its interest expenses for that year. This indicates a robust financial position and suggests that Costco has ample earnings to easily cover its interest obligations.
Overall, Costco's increasing interest coverage ratio demonstrates the company's financial stability and capacity to service its debt effectively, which is a positive indicator for investors and creditors alike.
Peer comparison
Sep 1, 2024