Grocery Outlet Holding Corp (GO)
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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 125,782 | 130,820 | 117,950 | 108,380 | 94,990 | 86,457 | 87,913 | 84,676 | 89,095 | 101,492 | 105,664 | 114,349 | 107,375 | 96,551 | 90,184 |
| Interest expense (ttm) | US$ in thousands | 21,648 | 24,314 | 23,452 | 21,390 | 19,092 | 16,229 | 14,717 | 14,400 | 14,374 | 12,793 | 14,411 | 16,490 | 19,358 | 24,752 | 27,366 |
| Interest coverage | 5.81 | 5.38 | 5.03 | 5.07 | 4.98 | 5.33 | 5.97 | 5.88 | 6.20 | 7.93 | 7.33 | 6.93 | 5.55 | 3.90 | 3.30 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $125,782K ÷ $21,648K
= 5.81
Interest coverage is a financial ratio that measures a company's ability to pay interest expenses on its outstanding debt. A higher interest coverage ratio indicates a stronger ability to meet interest obligations.
Analyzing the interest coverage ratios of Grocery Outlet Holding Corp over the past few quarters reveals a generally stable and healthy trend. The company's interest coverage ratio has fluctuated between 3.30 and 7.93 over the provided periods, with an average around 5.80.
In general, Grocery Outlet Holding Corp maintains a comfortable level of interest coverage, consistently above 1.5, which is considered the minimum acceptable level for most industries. With ratios consistently above 5.00, the company demonstrates a solid ability to meet its interest payment obligations.
It is worth noting that the interest coverage ratio peaked in the third quarter of 2021 at 7.93, indicating a strong ability to cover interest expenses. However, there was a slight decline in the recent quarters, with ratios hovering around 5.00. Despite this slight dip, the company's interest coverage remains healthy and suggests a reasonable level of financial stability.
Overall, based on the historical interest coverage ratios, Grocery Outlet Holding Corp appears to have a sound financial position in terms of its ability to cover interest expenses with its earnings.
Peer comparison
Dec 31, 2023