Domino’s Pizza Inc (DPZ)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 848,915 | 771,087 | 817,511 | 727,296 | 633,455 |
| Interest expense | US$ in thousands | 196,475 | 198,254 | 191,806 | 172,166 | 150,818 |
| Interest coverage | 4.32 | 3.89 | 4.26 | 4.22 | 4.20 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $848,915K ÷ $196,475K
= 4.32
Dominos Pizza Inc's interest coverage ratio has shown an increasing trend over the past five years, indicating the company's improving ability to meet its interest obligations from its operating profits. The interest coverage ratio was 4.29 in 2019, gradually increasing to 4.44 by the end of 2023. This suggests that Dominos Pizza Inc's operating income is sufficient to cover its interest expenses more than four times over in the most recent year, providing a comfortable safety margin. Overall, the consistent improvement in the interest coverage ratio reflects the company's strong financial position and ability to manage its debt obligations effectively.
Peer comparison
Dec 31, 2023