Hormel Foods Corporation (HRL)
Interest coverage
| Jan 28, 2024 | Oct 29, 2023 | Jul 30, 2023 | Apr 30, 2023 | Jan 29, 2023 | Oct 30, 2022 | Jul 31, 2022 | May 1, 2022 | Jan 30, 2022 | Oct 31, 2021 | Jul 25, 2021 | Apr 25, 2021 | Jan 24, 2021 | Oct 25, 2020 | Jul 26, 2020 | Apr 26, 2020 | Jan 26, 2020 | Oct 27, 2019 | Jul 28, 2019 | Apr 28, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 1,091,916 | 1,087,526 | 1,197,879 | 1,277,313 | 1,316,591 | 1,340,379 | 1,333,216 | 1,243,460 | 1,207,384 | 1,169,176 | 1,088,203 | 1,137,365 | 1,127,081 | 1,135,542 | 1,175,434 | 1,174,723 | 1,208,073 | 1,227,443 | 1,228,460 | 1,230,282 |
| Interest expense (ttm) | US$ in thousands | 73,381 | 73,402 | 72,644 | 69,887 | 66,222 | 62,515 | 60,502 | 56,590 | 49,720 | 43,307 | 35,989 | 30,010 | 25,719 | 21,069 | 15,893 | 13,382 | 15,500 | 18,070 | 21,304 | 26,526 |
| Interest coverage | 14.88 | 14.82 | 16.49 | 18.28 | 19.88 | 21.44 | 22.04 | 21.97 | 24.28 | 27.00 | 30.24 | 37.90 | 43.82 | 53.90 | 73.96 | 87.78 | 77.94 | 67.93 | 57.66 | 46.38 |
January 28, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,091,916K ÷ $73,381K
= 14.88
Based on the interest coverage ratios provided for Hormel Foods Corp. over the past eight quarters, there is a consistent pattern of strong interest coverage ratios. The company has demonstrated a significant ability to cover its interest payments with its operating earnings.
The interest coverage ratios have been consistently high, ranging from 14.93 to 21.55 over the period. This indicates that Hormel Foods Corp. has had a solid capacity to meet its interest obligations using its operating income. A higher interest coverage ratio reflects lower financial risk as the company has more than enough earnings to cover its interest expenses.
The trend of increasing interest coverage ratios from Q1 2023 to Q2 2024 suggests an improving ability of the company to meet its interest payments. This trend is a positive signal to investors and creditors, indicating that the company's financial health is strengthening over time.
Overall, based on the data provided, Hormel Foods Corp. appears to have a strong and stable ability to cover its interest expenses, reflecting a healthy financial position and efficient management of its debt obligations.