Dollar Tree Inc (DLTR)
Interest coverage
| Feb 3, 2024 | Oct 28, 2023 | Jul 29, 2023 | Apr 29, 2023 | Jan 28, 2023 | Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | May 1, 2021 | Jan 30, 2021 | Oct 31, 2020 | Aug 1, 2020 | May 2, 2020 | Feb 1, 2020 | Nov 2, 2019 | Aug 3, 2019 | May 4, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | -881,800 | 1,627,300 | 1,706,900 | 1,924,500 | 2,236,300 | 2,197,000 | 2,126,200 | 2,023,000 | 1,811,400 | 1,914,200 | 2,069,200 | 2,041,900 | 1,887,900 | 1,455,700 | 1,348,600 | 1,242,600 | 1,262,200 | -1,134,600 | -1,105,200 | -991,600 |
| Interest expense (ttm) | US$ in thousands | 106,800 | 108,500 | 110,800 | 117,200 | 125,300 | 176,800 | 177,500 | 179,900 | 178,900 | 133,600 | 138,300 | 140,100 | 147,300 | 152,300 | 155,600 | 160,900 | 162,100 | 169,200 | 175,400 | 181,400 |
| Interest coverage | -8.26 | 15.00 | 15.41 | 16.42 | 17.85 | 12.43 | 11.98 | 11.25 | 10.13 | 14.33 | 14.96 | 14.57 | 12.82 | 9.56 | 8.67 | 7.72 | 7.79 | -6.71 | -6.30 | -5.47 |
February 3, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-881,800K ÷ $106,800K
= -8.26
The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio indicates a company is more capable of meeting interest obligations.
Looking at the interest coverage ratio of Dollar Tree Inc over time, it is evident that there have been fluctuations. The company had a negative interest coverage in several periods, indicating that its operating income was insufficient to cover its interest expenses. The negative ratios are a cause for concern as it signifies potential financial distress.
However, there are periods where Dollar Tree Inc's interest coverage ratio improved significantly, surpassing 10x in some quarters. This indicates a healthier financial position and a stronger ability to meet interest payments from operating income.
It's important for investors and creditors to monitor these fluctuations in the interest coverage ratio as it can provide insights into the company's financial health and ability to manage its debt obligations effectively.
Peer comparison
Feb 3, 2024