Floor & Decor Holdings Inc (FND)
Interest coverage
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 321,428 | 369,983 | 386,868 | 398,304 | 396,760 | 363,128 | 344,868 | 337,015 | 338,992 | 345,917 | 341,322 | 264,869 | 215,594 | 189,704 | 142,302 | 166,093 | 159,181 | 140,370 | 143,207 | 134,557 |
| Interest expense (ttm) | US$ in thousands | 9,897 | 14,278 | 16,064 | 14,838 | 11,138 | 6,985 | 5,077 | 4,698 | 4,924 | 6,060 | 6,960 | 7,970 | 8,389 | 7,813 | 7,767 | 7,687 | 8,801 | 9,939 | 10,132 | 10,054 |
| Interest coverage | 32.48 | 25.91 | 24.08 | 26.84 | 35.62 | 51.99 | 67.93 | 71.74 | 68.84 | 57.08 | 49.04 | 33.23 | 25.70 | 24.28 | 18.32 | 21.61 | 18.09 | 14.12 | 14.13 | 13.38 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $321,428K ÷ $9,897K
= 32.48
Floor & Decor Holdings Inc has maintained a consistently strong interest coverage ratio over the past few years, with the latest ratio reported at 32.48 as of December 31, 2023. This indicates that the company's earnings before interest and taxes (EBIT) are sufficient to cover its interest expenses nearly 32 times over. The trend in interest coverage has fluctuated over the periods provided, with the ratio peaking at 71.74 on March 31, 2022, and hitting the lowest point of 13.38 on March 31, 2019.
The high values of the interest coverage ratio signal that Floor & Decor Holdings Inc is effectively managing its debt and has a robust ability to meet its interest obligations using its operational earnings. The decreasing trend from around 2022 to 2019, and the subsequent increase from 2019 to 2023, indicate fluctuations in the company's earnings and interest expenses over the years.
Investors and creditors typically view a high interest coverage ratio favorably as it implies a lower risk of default on interest payments. Floor & Decor Holdings Inc's consistently strong interest coverage ratios reflect sound financial health and the company's ability to meet its debt service obligations.
Peer comparison
Dec 31, 2023