RH (RH)
Interest coverage
| Jan 31, 2025 | Feb 3, 2024 | Jan 31, 2024 | Jan 31, 2023 | Jan 28, 2023 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 323,093 | 393,721 | 404,596 | 591,069 | 550,494 |
| Interest expense | US$ in thousands | 230,601 | 237,899 | 237,899 | 113,210 | 151,730 |
| Interest coverage | 1.40 | 1.65 | 1.70 | 5.22 | 3.63 |
January 31, 2025 calculation
Interest coverage = EBIT ÷ Interest expense
= $323,093K ÷ $230,601K
= 1.40
The interest coverage ratio for RH, which is a measure of the company's ability to cover its interest expenses with its operating income, has fluctuated over the years based on the provided data. In January 2023, the interest coverage ratio was 3.63, indicating the company's operating income was able to cover its interest expenses 3.63 times.
By January 2024, the interest coverage ratio had decreased to 1.70, suggesting a decline in the company's ability to cover its interest expenses. This trend continued in February 2024, with an interest coverage ratio of 1.65, indicating a further decrease in the company's ability to cover its interest obligations.
In January 2025, the interest coverage ratio fell to 1.40, indicating that the company's operating income was only able to cover its interest expenses 1.40 times. Overall, the declining trend in the interest coverage ratio raises concerns about the company's ability to meet its interest obligations with its current level of operating income.