Hormel Foods Corporation (HRL)
Interest coverage
| Oct 27, 2024 | Jul 28, 2024 | Apr 28, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 1,101,068 | 1,071,205 | 1,060,618 | 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 |
| Interest expense (ttm) | US$ in thousands | 80,894 | 79,824 | 76,737 | 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 |
| Interest coverage | 13.61 | 13.42 | 13.82 | 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 |
October 27, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,101,068K ÷ $80,894K
= 13.61
Hormel Foods Corporation has consistently displayed a strong interest coverage ratio over the periods provided, indicating its ability to comfortably meet its interest obligations through its earnings before interest and taxes (EBIT). The interest coverage ratios have shown an upward trend, reflecting the company's improving financial health and profitability.
The interest coverage ratio has consistently remained well above 10, which is generally considered a healthy level indicating that the company's earnings are more than sufficient to cover its interest expenses. Specifically, the ratios have ranged from 13.42 to 87.78, with a notable peak in the most recent period. This pattern suggests that Hormel Foods Corporation has significantly strengthened its ability to service its debt obligations over time.
Overall, the upward trend and consistently high interest coverage ratios reflect Hormel Foods Corporation's strong financial position and its ability to manage its debt efficiently. Investors and stakeholders can be reassured by the company's solid capacity to cover its interest payments, which is crucial for long-term sustainability and growth.