Macy’s Inc (M)
Interest coverage
| Feb 3, 2024 | Oct 28, 2023 | Jul 29, 2023 | Apr 29, 2023 | Jan 28, 2023 | Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | May 1, 2021 | Jan 30, 2021 | Oct 31, 2020 | Aug 1, 2020 | May 2, 2020 | Feb 1, 2020 | Nov 2, 2019 | Aug 3, 2019 | May 4, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 387,000 | 1,136,000 | 1,218,000 | 1,501,000 | 1,692,000 | 2,040,000 | 2,219,000 | 2,342,000 | 2,122,000 | 1,495,000 | 1,011,000 | -178,000 | -4,505,000 | -4,409,000 | -4,220,000 | -3,393,000 | 932,000 | 1,460,000 | 1,546,000 | 1,646,000 |
| Interest expense (ttm) | US$ in thousands | 135,000 | 149,000 | 157,000 | 164,000 | 174,000 | 177,000 | 187,000 | 224,000 | 256,000 | 297,000 | 324,000 | 314,000 | 284,000 | 245,000 | 217,000 | 199,000 | 204,000 | 215,000 | 227,000 | 244,000 |
| Interest coverage | 2.87 | 7.62 | 7.76 | 9.15 | 9.72 | 11.53 | 11.87 | 10.46 | 8.29 | 5.03 | 3.12 | -0.57 | -15.86 | -18.00 | -19.45 | -17.05 | 4.57 | 6.79 | 6.81 | 6.75 |
February 3, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $387,000K ÷ $135,000K
= 2.87
Interest coverage is a crucial financial ratio that indicates a company's ability to meet its interest obligations with its operating earnings. Macy's Inc has demonstrated fluctuating interest coverage ratios over the past few years.
The interest coverage ratio for Macy's Inc has shown a downward trend from February 2020 to July 2021, indicating a potential strain on the company's ability to cover its interest payments with its operating income during this period. It is notable that for January 2021, October 2020, and August 2020, the interest coverage ratios were negative, indicating that Macy's Inc did not have sufficient operating earnings to cover its interest expenses during these periods.
However, from October 2021 onwards, Macy's Inc has shown an improvement in its interest coverage ratio, with the ratio gradually increasing. This suggests that the company's operating earnings have been more than sufficient to cover its interest expenses in these more recent periods.
Overall, a higher interest coverage ratio is typically preferred as it indicates a more comfortable position for the company in meeting its interest obligations. Macy's Inc has made progress in improving its interest coverage ratio in recent periods, but ongoing monitoring of this ratio will be important to ensure the company's continued ability to meet its financial obligations.
Peer comparison
Feb 3, 2024