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

Company name
Symbol
Interest coverage
Grocery Outlet Holding Corp
GO
5.81
Kroger Company
KR
7.43
Sprouts Farmers Market LLC
SFM
35.81