Carter’s Inc (CRI)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 262,140 | 336,215 | 359,517 | 498,584 | 191,046 |
| Interest expense | US$ in thousands | 31,331 | 33,973 | 42,781 | 60,294 | 56,062 |
| Interest coverage | 8.37 | 9.90 | 8.40 | 8.27 | 3.41 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $262,140K ÷ $31,331K
= 8.37
The interest coverage ratio for Carter’s Inc has exhibited a positive trend over the past five years, indicating an improvement in the company's ability to meet its interest payment obligations with its operating income.
In 2020, the interest coverage ratio stood at 3.41, suggesting the company's operating income was able to cover its interest expenses approximately 3.41 times.
Subsequently, the ratio showed a significant increase to 8.27 in 2021, and continued to rise to 8.40 in 2022, 9.90 in 2023, and then slightly decreased to 8.37 in 2024.
The consistent improvement in the interest coverage ratio reflects Carter’s Inc's increasing profitability and financial stability, as a higher ratio indicates a stronger ability to service its debt with earnings. This trend signifies that the company has been effectively managing its interest payment obligations relative to its operating income, which could enhance investor confidence and potentially attract more favorable financing terms in the future.
Peer comparison
Dec 31, 2024