Brinker International Inc (EAT)
Interest coverage
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 229,900 | 145,700 | 161,300 | 201,400 | 64,500 |
| Interest expense | US$ in thousands | 65,000 | 54,900 | 46,100 | 56,200 | 59,600 |
| Interest coverage | 3.54 | 2.65 | 3.50 | 3.58 | 1.08 |
June 30, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $229,900K ÷ $65,000K
= 3.54
Brinker International Inc's interest coverage ratio has shown a fluctuating trend over the last five years. In 2024, the interest coverage ratio improved to 3.54 compared to the previous year's 2.65. This indicates an increase in the company's ability to cover interest expenses with its operating income. The ratio was also higher than in 2020 when it was at 1.08, reflecting a significant improvement in financial stability.
Although the interest coverage ratio in 2024 was not the highest over the five-year period, it remained relatively consistent with the ratios in 2022 and 2021, which were 3.50 and 3.58 respectively. This suggests that Brinker International Inc has consistently been able to generate sufficient operating income to cover its interest payments over the past few years, indicating financial strength and stability in managing debt obligations.
Overall, an interest coverage ratio above 1 indicates that the company is generating enough operating income to cover its interest expenses. Brinker International Inc's trend of maintaining a ratio above 1 and even showing improvement in recent years reflects a positive sign of financial health and ability to meet its debt obligations.
Peer comparison
Jun 30, 2024