Dollar General Corporation (DG)

Interest coverage

		Feb 2, 2024	Nov 3, 2023	Aug 4, 2023	May 5, 2023	Feb 3, 2023	Oct 28, 2022	Jul 29, 2022	Apr 29, 2022	Jan 28, 2022	Oct 29, 2021	Jul 30, 2021	Apr 30, 2021	Jan 29, 2021	Oct 30, 2020	Jul 31, 2020	May 1, 2020	Jan 31, 2020	Nov 1, 2019	Aug 2, 2019	May 3, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	2,446,300	2,799,820	3,101,476	3,322,588	3,327,887	3,191,382	3,121,840	3,057,982	3,220,675	3,296,230	3,403,772	3,596,834	3,554,768	3,403,419	3,121,706	2,656,851	2,302,304	2,219,932	2,170,658	2,137,340
Interest expense (ttm)	US$ in thousands	326,781	324,482	295,874	254,635	211,273	174,961	160,478	156,810	157,526	159,288	160,388	160,284	150,385	135,684	119,650	105,134	100,574	100,068	100,390	101,031
Interest coverage		7.49	8.63	10.48	13.05	15.75	18.24	19.45	19.50	20.45	20.69	21.22	22.44	23.64	25.08	26.09	25.27	22.89	22.18	21.62	21.16

February 2, 2024 calculation

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

The interest coverage ratio for Dollar General Corporation has shown a consistent upward trend over the past several quarters, indicating a positive sign of the company's ability to meet its interest obligations. The ratio has increased steadily from 7.49 in May 2019 to 26.09 in July 2020, reflecting a significant improvement in its ability to cover interest expenses.

This strong upward trajectory suggests that Dollar General's operating income is more than sufficient to cover its interest payments, providing a buffer against financial risks associated with debt repayment. The company's robust interest coverage ratios in recent quarters demonstrate a healthy financial position and effective management of its debt obligations.

Overall, the upward trend in Dollar General's interest coverage ratio highlights the company's financial strength and ability to manage its debt efficiently, which is favorable for its long-term financial sustainability and stability.