General Mills Inc (GIS)

Interest coverage

		May 31, 2024	May 26, 2024	May 31, 2023	May 28, 2023	May 31, 2022
Earnings before interest and tax (EBIT)	US$ in thousands	3,526,300	3,570,300	3,536,600	3,588,200	3,593,000
Interest expense	US$ in thousands	498,000	479,200	396,100	382,100	383,400
Interest coverage		7.08	7.45	8.93	9.39	9.37

May 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $3,526,300K ÷ $498,000K
= 7.08

Based on the provided data, General Mills Inc's interest coverage ratio has been relatively stable over the reported periods. The interest coverage ratio measures a company's ability to meet its interest obligations with its earnings.

General Mills Inc's interest coverage ratio was 9.37 as of May 31, 2022, indicating that the company generated earnings nearly 9.37 times greater than its interest expenses. The ratio slightly increased to 9.39 by May 28, 2023, suggestive of a continued ability to comfortably cover its interest payments.

However, there was a slight decline in the interest coverage ratio to 8.93 by May 31, 2023, which could be a sign of increased pressure on the company's ability to cover its interest expenses. This trend continued with further decreases in the ratio to 7.45 as of May 26, 2024, and 7.08 by May 31, 2024, indicating a potential decline in earnings relative to interest obligations.

Although the interest coverage ratio remained above 1 (which indicates that the company is generating enough earnings to cover its interest payments) throughout the periods, the decreasing trend suggests that General Mills Inc's ability to cover interest expenses may be weakening. It would be advisable for investors and stakeholders to monitor this trend closely in the future to assess the company's financial health and sustainability.