Kroger Company (KR)
Interest coverage
| Feb 3, 2024 | Nov 4, 2023 | Aug 12, 2023 | May 20, 2023 | Jan 28, 2023 | Nov 5, 2022 | Aug 13, 2022 | May 21, 2022 | Jan 29, 2022 | Nov 6, 2021 | Aug 14, 2021 | May 22, 2021 | Jan 30, 2021 | Nov 7, 2020 | May 23, 2020 | Feb 1, 2020 | Nov 9, 2019 | Aug 17, 2019 | May 25, 2019 | Feb 2, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 3,271,000 | 2,976,000 | 2,675,000 | 3,847,000 | 3,433,000 | 3,541,000 | 3,593,000 | 3,256,000 | 2,610,000 | 1,761,000 | 2,028,000 | 3,057,000 | 3,254,000 | 3,738,000 | 3,296,000 | 2,732,000 | 2,661,000 | 2,732,000 | 2,991,000 | 4,630,000 |
| Interest expense (ttm) | US$ in thousands | 440,000 | 453,000 | 478,000 | 512,000 | 536,000 | 556,000 | 572,000 | 582,000 | 570,000 | 543,000 | 537,000 | 574,000 | 549,000 | 580,000 | 581,000 | 604,000 | 606,000 | 611,000 | 625,000 | 620,000 |
| Interest coverage | 7.43 | 6.57 | 5.60 | 7.51 | 6.40 | 6.37 | 6.28 | 5.59 | 4.58 | 3.24 | 3.78 | 5.33 | 5.93 | 6.44 | 5.67 | 4.52 | 4.39 | 4.47 | 4.79 | 7.47 |
February 3, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $3,271,000K ÷ $440,000K
= 7.43
The interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt. A higher ratio indicates a better ability to cover interest payments.
Based on the data provided for Kroger Company, we can observe fluctuations in the interest coverage ratio over the analyzed periods. The interest coverage ratio ranged from a low of 3.24 to a high of 7.51 during the period.
A lower interest coverage ratio, as seen in some periods for Kroger, such as 3.24 and 3.78, suggests that the company may have had difficulties covering its interest expenses with operating income during those specific periods. This could imply higher financial risk, as the company may be more vulnerable to potential cash flow issues or economic downturns.
Conversely, periods with higher interest coverage ratios, like 7.43 and 7.51, indicate a stronger ability to fulfill interest payments from operating income, potentially signaling more financial stability and lower risk.
It is important for investors and stakeholders to monitor the trend of the interest coverage ratio over time to assess the company's financial health and risk profile. A consistent or improving trend in the interest coverage ratio suggests a healthier financial position, while a declining trend may raise concerns about the company's ability to manage its debt obligations effectively.
Peer comparison
Feb 3, 2024