Ross Stores Inc (ROST)

Interest coverage

		Jan 31, 2025	Nov 2, 2024	Aug 3, 2024	May 4, 2024	Feb 3, 2024	Oct 31, 2023	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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	2,681,646	2,641,143	2,544,511	2,496,949	2,519,377	2,282,009	2,333,647	2,193,789	2,106,348	2,066,820	1,956,399	2,007,554	2,157,769	2,333,242	2,244,096	1,886,361	1,295,143	189,889	375,036	687,883
Interest expense (ttm)	US$ in thousands	47,992	51,930	70,171	71,480	72,899	74,600	76,703	79,397	81,066	79,331	76,997	74,998	73,548	75,137	76,458	86,262	96,968	87,685	70,557	44,131
Interest coverage		55.88	50.86	36.26	34.93	34.56	30.59	30.42	27.63	25.98	26.05	25.41	26.77	29.34	31.05	29.35	21.87	13.36	2.17	5.32	15.59

January 31, 2025 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $2,681,646K ÷ $47,992K
= 55.88

Ross Stores Inc's interest coverage ratio has fluctuated over the years based on the data provided.

As of January 31, 2025, the interest coverage ratio stands at 55.88, indicating the company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio suggests that Ross Stores Inc is more capable of meeting its interest payments from its earnings.

From August 1, 2020, to January 30, 2021, the interest coverage ratio declined significantly from 15.59 to 2.17. This sharp decrease may have been a cause for concern as it indicates a potential strain on the company's ability to cover its interest expenses during that period.

However, from May 1, 2021, to November 2, 2024, Ross Stores Inc showed a positive trend in its interest coverage ratio, reaching a peak of 50.86 on November 2, 2024. This improvement suggests the company was better able to meet its interest obligations with its operational earnings during this period.

Overall, the upward trend in Ross Stores Inc's interest coverage ratio from 2021 to early 2024 implies a strengthening financial position in terms of servicing its debt obligations. Investors and creditors may view this trend positively as it indicates improved financial stability and reduced risk of default due to insufficient earnings to cover interest expenses.