Flowers Foods Inc (FLO)

Interest coverage

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	366,071	193,716	327,632	302,306	239,356
Interest expense	US$ in thousands	37,129	36,609	28,921	31,534	12,094
Interest coverage		9.86	5.29	11.33	9.59	19.79

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $366,071K ÷ $37,129K
= 9.86

Flowers Foods Inc's interest coverage ratio has shown fluctuations over the past five years.

As of December 31, 2020, the interest coverage ratio was 19.79, indicating the company's ability to cover its interest expenses approximately 19.79 times with its operating income. This level of coverage reflects a strong financial position and suggests that Flowers Foods had ample earnings to meet its interest obligations.

However, by December 31, 2023, the interest coverage ratio had declined to 5.29. This decrease may raise concerns as it indicates a lower ability to cover interest expenses with operating income, potentially signaling increased financial risk for the company.

In the most recent period ending December 31, 2024, the interest coverage ratio improved to 9.86. While this is an improvement from the previous year, the ratio is still lower than the initial period in 2020. Flowers Foods should closely monitor this ratio to ensure that it maintains a healthy level of coverage to meet its interest obligations without difficulty.

Overall, the fluctuation in Flowers Foods' interest coverage ratio over the years underscores the importance of monitoring the company's financial performance and managing its debt levels effectively to ensure long-term financial stability.