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

Company name
Symbol
Interest coverage
Kroger Company
KR
7.43
Grocery Outlet Holding Corp
GO
5.81
Sprouts Farmers Market LLC
SFM
35.81