Dollar General Corporation (DG)

Interest coverage

		Feb 2, 2024	Feb 3, 2023	Jan 28, 2022	Jan 29, 2021	Jan 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	2,446,300	3,327,890	3,220,680	3,554,760	2,302,300
Interest expense	US$ in thousands	326,781	211,273	157,526	150,385	100,574
Interest coverage		7.49	15.75	20.45	23.64	22.89

February 2, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $2,446,300K ÷ $326,781K
= 7.49

The interest coverage ratio for Dollar General Corporation has exhibited a declining trend over the past five years, indicating a decrease in the company's ability to cover its interest expenses with operating income. The ratio has decreased from a high of 23.64 in January 2021 to 7.49 in February 2024. This decline may raise concerns about the company's ability to meet its interest obligations using its earnings. It suggests that the company may be becoming more leveraged or facing challenges in generating sufficient operating income to cover its interest expenses. Investors and creditors should monitor this trend closely as it may impact the company's financial health and ability to service its debt in the future.