Performance Food Group Co (PFGC)
Interest coverage
| Mar 31, 2024 | 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 808,500 | 822,300 | 801,100 | 762,000 | 663,900 | 576,100 | 480,800 | 350,000 | 268,300 | 213,400 | 219,800 | 207,100 | -99,400 | -149,700 | -132,000 | -105,300 | 219,300 | 304,800 | 296,400 | 283,700 |
| Interest expense (ttm) | US$ in thousands | 230,600 | 229,400 | 223,700 | 218,000 | 209,800 | 199,800 | 189,300 | 182,900 | 173,500 | 164,700 | 157,600 | 152,400 | 152,000 | 150,100 | 138,400 | 116,900 | 96,200 | 77,500 | 67,100 | 65,400 |
| Interest coverage | 3.51 | 3.58 | 3.58 | 3.50 | 3.16 | 2.88 | 2.54 | 1.91 | 1.55 | 1.30 | 1.39 | 1.36 | -0.65 | -1.00 | -0.95 | -0.90 | 2.28 | 3.93 | 4.42 | 4.34 |
March 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $808,500K ÷ $230,600K
= 3.51
The interest coverage ratio for Performance Food Group Co has fluctuated significantly over the past few quarters. The company had a relatively stable interest coverage ratio above 3.00 from March 2020 to December 2021, indicating its ability to cover its interest expenses comfortably. However, there was a notable decline starting from March 2022, with a sharp decrease in interest coverage to negative levels in March and December 2021.
The negative interest coverage ratios in March and December 2021 suggest that Performance Food Group Co may have faced challenges in generating enough operating income to cover its interest expenses during those periods. A negative interest coverage ratio implies that the company's earnings were insufficient to meet its interest payments, which could raise concerns about its financial health and ability to service its debt obligations.
The subsequent improvement in interest coverage ratios from June 2022 to March 2024 indicates a recovery in the company's ability to cover its interest expenses. However, the ratios remained below the levels observed before the decline in 2022.
Overall, the fluctuating trend in Performance Food Group Co's interest coverage ratio highlights the importance of monitoring the company's ability to generate sufficient income to meet its interest obligations, as sustained low coverage ratios or negative ratios can signal financial distress and potential challenges with debt repayment.
Peer comparison
Mar 31, 2024