Performance Food Group Co (PFGC)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 697,600 | 760,100 | 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 |
| Interest expense (ttm) | US$ in thousands | 285,500 | 241,400 | 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 |
| Interest coverage | 2.44 | 3.15 | 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 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $697,600K ÷ $285,500K
= 2.44
Performance Food Group Co's interest coverage ratio has shown fluctuating trends over the past few years.
The interest coverage ratio measures the company's ability to meet its interest obligations, with a higher ratio indicating a stronger ability to cover interest expenses.
From December 2019 to June 2020, the interest coverage ratio exhibited a declining trend, falling into negative territory indicating that the company's earnings were insufficient to cover its interest expenses during this period.
However, from June 2020 onwards, there was a gradual improvement in the interest coverage ratio reaching 3.58 by September 30, 2023. This increase suggests that Performance Food Group Co's earnings have strengthened, allowing it to comfortably cover its interest payments.
Although there was a slight decrease in the interest coverage ratio by the end of 2024 to 2.44, this ratio is still above 1, indicating that the company is generating enough earnings to cover its interest expenses, albeit with a lower margin of safety compared to previous periods.
Overall, the increasing trend in the interest coverage ratio from 2020 to 2023 reflects an improvement in Performance Food Group Co's financial position and ability to service its debt obligations.
Peer comparison
Dec 31, 2024