Nordstrom Inc (JWN)
Interest coverage
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 251,000 | 465,000 | 492,000 | -1,047,000 | 784,000 |
| Interest expense | US$ in thousands | 104,000 | 128,000 | 246,000 | 181,000 | 102,000 |
| Interest coverage | 2.41 | 3.63 | 2.00 | -5.78 | 7.69 |
February 3, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $251,000K ÷ $104,000K
= 2.41
The interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt. A higher ratio indicates a stronger ability to cover interest expenses.
Nordstrom Inc's interest coverage ratio has fluctuated over the past five years, as indicated by the trend in the table. In the most recent fiscal year, ending February 3, 2024, the interest coverage ratio was 2.41, indicating that the company generated enough operating income to cover its interest expenses 2.41 times over.
Comparing this to the prior years, we see a decrease from 3.63 in January 28, 2023, to 2.00 in January 29, 2022. The significant improvement from a negative ratio of -5.78 in January 30, 2021, suggests a reversal of the prior year's financial challenges.
It is important to note the exceptional metric of 7.69 in February 1, 2020, representing robust interest coverage in that period. Overall, Nordstrom Inc's interest coverage ratio has shown some volatility, with recent years demonstrating better performance in meeting interest obligations.
Peer comparison
Feb 3, 2024