Hanesbrands Inc (HBI)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 138,507 | 258,336 | 594,327 | 747,975 | 29,648 |
| Interest expense | US$ in thousands | 195,901 | 275,354 | 157,073 | 163,067 | 166,491 |
| Interest coverage | 0.71 | 0.94 | 3.78 | 4.59 | 0.18 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $138,507K ÷ $195,901K
= 0.71
The interest coverage ratio for Hanesbrands Inc has shown fluctuations over the years. In December 31, 2020, the interest coverage ratio was quite low at 0.18, indicating that the company's operating income was only able to cover 18% of its interest payments.
However, by December 31, 2021, the interest coverage ratio significantly improved to 4.59, suggesting a stronger ability to meet interest obligations. This improved trend continued in December 31, 2022, with a ratio of 3.78, showing a decent coverage of interest expenses.
In December 31, 2023, there was a notable decrease in the interest coverage ratio to 0.94, indicating a potential strain on the company's ability to cover its interest payments. Furthermore, by December 31, 2024, the ratio declined even further to 0.71, raising concerns about the company's financial health in meeting its interest obligations.
Overall, while the company showed improvement in managing its interest payments in 2021 and 2022, the sharp decline in 2023 and 2024 underscores the importance of closely monitoring Hanesbrands Inc's ability to generate sufficient operating income to cover its interest expenses.