Kohls Corp (KSS)
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 | 717,000 | 246,000 | 1,680,000 | -262,000 | 1,099,000 |
| Interest expense | US$ in thousands | 144,000 | 140,000 | 111,000 | 102,000 | 98,000 |
| Interest coverage | 4.98 | 1.76 | 15.14 | -2.57 | 11.21 |
February 3, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $717,000K ÷ $144,000K
= 4.98
The interest coverage ratio for Kohls Corp has fluctuated over the past five years. In 2024, the interest coverage ratio was 4.98, indicating that the company's earnings before interest and taxes (EBIT) were nearly five times its interest expense for that year. This suggests that Kohls Corp had a comfortable cushion to meet its interest obligations.
However, in 2023, the interest coverage ratio decreased to 1.76, signaling a lower ability to cover its interest payments with operating income. This could indicate increased financial risk or a decrease in profitability.
In stark contrast, the interest coverage ratio spiked to 15.14 in 2022, reflecting a significant improvement from the previous year. This demonstrates a strong ability to fulfill interest obligations with earnings, indicating financial strength and stability.
The negative interest coverage ratio of -2.57 in 2021 is a concerning sign as it suggests that Kohls Corp did not generate enough operating income to cover its interest expenses that year. This could indicate financial distress or significant operational challenges.
The interest coverage ratio rebounded strongly to 11.21 in 2020, showing a substantial improvement from the prior year. This suggests that Kohls Corp had a strong ability to cover its interest payments with its operating income in that period.
Overall, interpreting these fluctuations in Kohls Corp's interest coverage ratio highlights the company's changing financial health and ability to manage its debt obligations over the five-year period.
Peer comparison
Feb 3, 2024