General Mills Inc (GIS)

Interest coverage

		May 31, 2025	May 31, 2024	May 26, 2024	May 31, 2023	May 28, 2023
Earnings before interest and tax (EBIT)	US$ in thousands	3,359,200	3,526,300	3,570,300	3,536,600	3,588,200
Interest expense	US$ in thousands	524,200	498,000	479,200	396,100	382,100
Interest coverage		6.41	7.08	7.45	8.93	9.39

May 31, 2025 calculation

Interest coverage = EBIT ÷ Interest expense
= $3,359,200K ÷ $524,200K
= 6.41

The interest coverage ratio for General Mills Inc. demonstrates a declining trend over the period analyzed. As of May 28, 2023, the ratio stood at 9.39, indicating that the company's earnings before interest and taxes (EBIT) were approximately 9.39 times greater than its interest expense, suggesting a comfortable ability to meet interest obligations. By May 31, 2023, this ratio slightly decreased to 8.93, reflecting a modest erosion in coverage but still maintaining a strong financial position.

The ratio further declined to 7.45 as of May 26, 2024, and continued this downward trajectory to 7.08 on May 31, 2024. Despite the continuous decline, the coverage remains above seven times, indicating that the company's EBIT comfortably exceeds its interest obligations, albeit with a narrowing margin.

Forecasting to May 31, 2025, the ratio is projected to decrease to 6.41, suggesting a further weakening in the company's ability to cover interest expenses from its operating earnings. Although the ratio remains above the generally considered safe threshold of 3 to 4 times, the downward trend signals potential pressure on interest coverage that warrants ongoing monitoring.

Overall, the data indicates that while General Mills Inc. has historically maintained strong interest coverage ratios, there is a consistent decline over the analyzed period. This trend, if continued, could lead to tighter financial flexibility and increased concern about the company's ability to meet interest obligations solely from its operating earnings in the future.