Darden Restaurants Inc (DRI)
Interest coverage
| May 31, 2024 | May 26, 2024 | May 31, 2023 | May 28, 2023 | May 31, 2022 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,315,300 | 1,314,200 | 1,205,600 | 1,169,100 | 1,166,700 |
| Interest expense | US$ in thousands | 143,200 | -4,500 | 61,700 | 50,200 | 70,600 |
| Interest coverage | 9.19 | — | 19.54 | 23.29 | 16.53 |
May 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,315,300K ÷ $143,200K
= 9.19
The interest coverage ratio of Darden Restaurants Inc has exhibited fluctuations over the reported periods. As of May 31, 2022, the interest coverage stood at 16.53, indicating that the company generated earnings more than 16 times to cover its interest expenses, which reflects a satisfactory level of financial health. Subsequently, in May 28, 2023, the interest coverage ratio improved significantly to 23.29, suggesting a stronger ability to meet interest obligations.
However, by May 31, 2023, the interest coverage ratio decreased to 19.54, showing a slight decline compared to the previous period but still indicating a healthy ability to cover interest payments. The data for May 26, 2024, is not available (marked as "—"), potentially signaling incomplete information or a reporting gap.
By the end of May 31, 2024, the interest coverage ratio decreased notably to 9.19, which indicates a lower capacity to cover interest expenses from operating income. A declining interest coverage ratio could raise concerns about the company's ability to service its debt obligations efficiently. Further analysis and monitoring may be required to understand the underlying reasons for this decrease and assess the potential impact on the company's financial stability.
Peer comparison
May 31, 2024