Ollie's Bargain Outlet Hldg (OLLI)

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	227,799	130,918	204,592	277,500	171,855
Interest expense	US$ in thousands	267	256	256	256	296
Interest coverage		853.18	511.40	799.19	1,083.98	580.59

February 3, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $227,799K ÷ $267K
= 853.18

Interest coverage ratio measures a company's ability to pay its interest expenses on outstanding debt. A higher interest coverage ratio indicates that the company is more capable of meeting its interest payments.

Looking at the trend of Ollie's Bargain Outlet Hldg interest coverage ratio over the past five years, we observe that it has fluctuated significantly. The interest coverage ratio was strongest in January 2021 at 1,083.98, which indicates a very comfortable position to pay interest obligations. This could be a result of higher earnings relative to interest expenses during that period.

However, the interest coverage ratio decreased to 853.18 in February 2024, indicating a slight decline in the ability to cover interest payments compared to the previous year. Despite this decrease, the ratio is still at a relatively high level, suggesting that Ollie's Bargain Outlet Hldg continues to have a strong ability to cover its interest expenses.

It is worth noting that the interest coverage ratio has fluctuated throughout the years, indicating some variability in the company's financial performance. Investors and creditors should continue to monitor this ratio to ensure that Ollie's Bargain Outlet Hldg can consistently meet its interest obligations in the future.