Lowe's Companies Inc (LOW)

Interest coverage

		Feb 2, 2024	Feb 3, 2023	Jan 28, 2022	Jan 29, 2021	Jan 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	11,557,000	10,159,000	12,093,000	9,647,000	6,314,000
Interest expense	US$ in thousands	1,482,000	1,157,000	885,000	872,000	718,000
Interest coverage		7.80	8.78	13.66	11.06	8.79

February 2, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $11,557,000K ÷ $1,482,000K
= 7.80

Lowe's Companies Inc interest coverage has demonstrated fluctuations over the past five years. The interest coverage ratio indicates the company's ability to meet its interest expenses based on its earnings before interest and taxes (EBIT). A higher interest coverage ratio is generally considered favorable as it suggests the company is more capable of servicing its debt obligations.

In the most recent fiscal year, as of February 2, 2024, Lowe's interest coverage ratio stood at 7.80, a decrease from the previous year's ratio of 8.78. While the decrease may raise concerns about the company's ability to cover its interest payments efficiently, the ratio remains above 1, indicating that Lowe's earnings are still sufficient to meet its interest expenses.

Comparing the current ratio to the ratios of the preceding years, Lowe's interest coverage was notably higher in the fiscal years ending in January 2022 and January 2021, with ratios of 13.66 and 11.06, respectively, indicating stronger financial health during those periods. In contrast, the interest coverage ratio for the fiscal year ending in January 2020 was 8.79, showing a similar level to the most recent fiscal year.

Overall, while the recent decrease in Lowe's Companies Inc interest coverage ratio may warrant monitoring, the company's historical performance suggests a generally stable ability to cover its interest expenses over the past five years.