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.
Peer comparison
Feb 2, 2024