Kontoor Brands Inc (KTB)

Interest coverage

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	312,307	322,942	313,370	338,729	354,055	337,089	349,628	298,976	283,500	276,762	273,509	216,118	122,928	118,180	66,068	142,797
Interest expense (ttm)	US$ in thousands	40,408	40,194	38,598	37,169	34,919	37,427	35,725	35,132	38,900	39,272	45,365	50,844	49,992	51,219	52,110	46,628
Interest coverage		7.73	8.03	8.12	9.11	10.14	9.01	9.79	8.51	7.29	7.05	6.03	4.25	2.46	2.31	1.27	3.06

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $312,307K ÷ $40,408K
= 7.73

The interest coverage ratio for Kontoor Brands Inc has been fluctuating over the past few quarters, indicating varying levels of financial stability and ability to meet interest obligations. The ratio exceeded 7 in most of the recent quarters, suggesting that the company generated sufficient operating income to cover its interest expenses.

The trend shows an improvement in the interest coverage ratio from the first quarter of 2020 to the first quarter of 2023, with a peak at 10.14 in December 2022, indicating a stronger ability to cover interest payments. However, there was a slight decrease in the last quarter of 2023, with the ratio dropping to 7.73.

Overall, Kontoor Brands Inc's interest coverage ratio remains at levels that indicate the company has generally been able to comfortably service its debt obligations with its operating income. Investors and creditors may view this positively as it suggests a lower risk of default due to inadequate cash flows to cover interest expenses. It is important for the company to monitor and maintain a healthy interest coverage ratio to ensure continued financial stability.