Darden Restaurants Inc (DRI)
Interest coverage
| May 26, 2024 | May 28, 2023 | May 29, 2022 | May 30, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,314,200 | 1,169,100 | 1,132,500 | 620,900 | -114,900 |
| Interest expense | US$ in thousands | -4,500 | 50,200 | 40,900 | 47,500 | 49,300 |
| Interest coverage | — | 23.29 | 27.69 | 13.07 | -2.33 |
May 26, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,314,200K ÷ $-4,500K
= —
The interest coverage ratio for Darden Restaurants Inc has shown variability over the past five years. In May 2020, the company had a negative interest coverage ratio of -2.33, indicating that its earnings before interest and taxes were insufficient to cover its interest expenses. This negative ratio suggests financial stress and a potential inability to meet debt obligations.
However, there has been a significant improvement in the interest coverage ratio over the subsequent years. By May 2021, the ratio had increased to 13.07, indicating that the company's earnings were more than sufficient to cover its interest expenses. This improvement suggests a stronger financial position and enhanced ability to meet debt obligations comfortably.
In the following years, Darden Restaurants Inc continued to improve its interest coverage ratio, reaching 27.69 in May 2022 and further increasing to 23.29 in May 2023. These high ratios indicate a robust ability to service interest payments with earnings, highlighting financial stability and reliability in meeting debt obligations.
Overall, the trend in Darden Restaurants Inc's interest coverage ratio demonstrates a positive trajectory, reflecting enhanced profitability and financial health over the past five years.
Peer comparison
May 26, 2024