Costco Wholesale Corp (COST)

Interest coverage

		Sep 1, 2024	May 12, 2024	Feb 18, 2024	Nov 26, 2023	Sep 3, 2023	May 7, 2023	Feb 12, 2023	Nov 20, 2022	Aug 28, 2022	May 8, 2022	Feb 13, 2022	Nov 21, 2021	Aug 29, 2021	May 9, 2021	Feb 14, 2021	Nov 22, 2020	Aug 30, 2020	May 10, 2020	Feb 16, 2020	Nov 24, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	9,909,000	9,766,000	9,248,000	8,987,000	8,647,000	8,182,000	8,218,000	8,017,000	7,927,000	7,692,000	7,526,000	7,049,000	6,779,000	6,365,000	5,874,000	5,830,000	5,470,000	5,089,000	5,051,000	4,993,000
Interest expense (ttm)	US$ in thousands	169,000	176,000	171,000	164,000	160,000	152,000	151,000	153,000	158,000	162,000	167,000	171,000	171,000	170,000	167,000	161,000	160,000	154,000	152,000	152,000
Interest coverage		58.63	55.49	54.08	54.80	54.04	53.83	54.42	52.40	50.17	47.48	45.07	41.22	39.64	37.44	35.17	36.21	34.19	33.05	33.23	32.85

September 1, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $9,909,000K ÷ $169,000K
= 58.63

The interest coverage ratio for Costco Wholesale Corp has shown a consistent and healthy trend over the displayed periods, ranging from 32.85 to 58.63. This indicates that the company's ability to cover its interest expenses from its earnings remains strong. Higher values of the interest coverage ratio imply that Costco is generating ample operating income to comfortably meet its interest obligations. The consistent levels above 30 suggest that the company has a robust capacity to service its debt and indicates a lower risk of financial distress due to interest payment defaults. Overall, the trend in Costco's interest coverage ratio reflects a financially stable and well-managed company with a solid ability to meet its interest obligations.