FedEx Corporation (FDX)
Interest coverage
| May 31, 2025 | Feb 28, 2025 | Nov 30, 2024 | Aug 31, 2024 | May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 6,280,000 | 6,532,000 | 6,458,000 | 6,542,000 | 6,963,000 | 7,005,000 | 6,875,000 | 6,726,000 | 6,427,000 | 4,998,000 | 5,375,000 | 5,656,000 | 6,007,000 | 8,252,000 | 7,825,000 | 7,696,000 | 7,806,000 | 4,691,000 | 3,885,000 | 3,208,000 |
| Interest expense (ttm) | US$ in thousands | 0 | 96,000 | 187,000 | 284,000 | 375,000 | 384,000 | 1,058,000 | 1,150,000 | 1,172,000 | 1,409,000 | 809,000 | 775,000 | 822,000 | 666,000 | 688,000 | 717,000 | 741,000 | 729,000 | 697,000 | 664,000 |
| Interest coverage | — | 68.04 | 34.53 | 23.04 | 18.57 | 18.24 | 6.50 | 5.85 | 5.48 | 3.55 | 6.64 | 7.30 | 7.31 | 12.39 | 11.37 | 10.73 | 10.53 | 6.43 | 5.57 | 4.83 |
May 31, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $6,280,000K ÷ $0K
= —
The analysis of FedEx Corporation's interest coverage over the specified periods reveals notable fluctuations, reflecting variations in its ability to meet interest obligations through earnings before interest and taxes (EBIT).
Historically, the interest coverage ratio exhibited a gradual increase from 4.83 times as of August 31, 2020, to a peak of 12.39 times by February 28, 2022, indicating a strong capacity to cover interest expenses during this period. This upward trend suggests improved operational profitability and efficient debt management.
Between February 28, 2022, and February 28, 2023, there was a noticeable decline in the ratio, decreasing from 12.39 to 3.55. This significant drop indicates a reduction in earnings relative to interest expenses, possibly due to operational challenges or increased interest burdens. The ratio then showed some recovery, rising to 6.50 times as of November 30, 2023, suggesting a partial stabilization in the company's ability to service debt.
The most remarkable changes are observed starting from November 30, 2023, onward, where the ratio demonstrated a sharp upward trajectory, reaching 18.24 times on February 29, 2024, and further increasing to 34.53 by November 30, 2024. This substantial improvement indicates an enhanced capacity to cover interest expenses, potentially driven by significantly higher EBIT margins or reduced interest costs.
By February 28, 2025, the ratio is projected to reach 68.04, implying an extremely strong interest coverage position. However, the absence of data beyond this date prevents analysis of future trends or reversals.
Overall, the interest coverage ratio for FedEx has experienced considerable fluctuations, reflecting changes in earnings strength and possibly alterations in the company's debt structure or interest expense management. The recent pronounced increase suggests a period of robust profitability or lowered interest obligations, positioning the company favorably in terms of debt servicing capacity.