Hormel Foods Corporation (HRL)
Interest coverage
| Jan 31, 2025 | Oct 31, 2024 | Oct 27, 2024 | Jul 31, 2024 | Jul 28, 2024 | Apr 30, 2024 | Apr 28, 2024 | Jan 31, 2024 | Jan 28, 2024 | Oct 31, 2023 | Oct 29, 2023 | Jul 31, 2023 | Jul 30, 2023 | Apr 30, 2023 | Jan 31, 2023 | Jan 29, 2023 | Oct 31, 2022 | Oct 30, 2022 | Jul 31, 2022 | May 1, 2022 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 1,078,653 | 1,077,811 | 1,044,169 | 1,015,577 | 1,072,272 | 1,139,586 | 1,137,934 | 1,136,663 | 1,058,788 | 980,887 | 1,013,883 | 1,048,814 | 1,122,433 | 1,271,424 | 1,349,232 | 1,355,135 | 1,391,982 | 1,353,411 | 1,301,985 | 1,319,939 |
| Interest expense (ttm) | US$ in thousands | 79,781 | 81,778 | 84,027 | 86,276 | 83,143 | 80,010 | 76,691 | 73,372 | 73,418 | 73,464 | 73,427 | 73,414 | 73,389 | 72,619 | 71,898 | 69,166 | 65,477 | 62,533 | 59,571 | 58,596 |
| Interest coverage | 13.52 | 13.18 | 12.43 | 11.77 | 12.90 | 14.24 | 14.84 | 15.49 | 14.42 | 13.35 | 13.81 | 14.29 | 15.29 | 17.51 | 18.77 | 19.59 | 21.26 | 21.64 | 21.86 | 22.53 |
January 31, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,078,653K ÷ $79,781K
= 13.52
Hormel Foods Corporation's interest coverage ratio measures its ability to meet interest payments on its debt obligations. A higher interest coverage ratio indicates that the company is more capable of servicing its debt.
From May 1, 2022, to January 31, 2025, Hormel Foods Corporation's interest coverage ratio has shown a declining trend from 22.53 to 13.52. This trend indicates a decrease in the company's ability to cover its interest expenses over time.
The interest coverage ratio of Hormel Foods Corporation has gradually declined over the period, which could be a cause for concern. A declining interest coverage ratio may indicate increasing financial leverage or a potential strain on the company's ability to meet interest obligations.
It is important for investors and stakeholders to monitor this trend closely and assess the company's overall financial health and sustainability in meeting its debt obligations.