Ross Stores Inc (ROST)

Interest coverage

		Feb 3, 2024	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	May 2, 2020	Feb 1, 2020	Nov 2, 2019	Aug 3, 2019	May 4, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	2,545,876	2,333,647	2,193,789	2,106,348	2,068,015	1,957,594	2,008,749	2,159,163	2,333,677	2,244,531	1,887,126	1,296,466	194,312	384,916	704,149	1,169,518	2,173,995	2,131,728	2,094,764	2,065,541
Interest expense (ttm)	US$ in thousands	74,095	76,703	79,397	81,066	80,526	78,192	76,193	74,743	75,137	76,458	86,592	97,298	88,015	70,854	44,098	16,878	9,707	11,068	12,933	14,786
Interest coverage		34.36	30.42	27.63	25.98	25.68	25.04	26.36	28.89	31.06	29.36	21.79	13.32	2.21	5.43	15.97	69.29	223.96	192.60	161.97	139.70

February 3, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $2,545,876K ÷ $74,095K
= 34.36

Looking at the interest coverage ratio of Ross Stores Inc over the past few periods, there are some notable trends. The interest coverage ratio measures a company's ability to fulfill its interest payment obligations on its debt with its operating income.

From February 2024 to May 2019, Ross Stores Inc maintained a healthy interest coverage ratio, ranging from 25.68 to 223.96. This indicates that the company had more than enough operating income to cover its interest expenses during these periods, showing a strong financial position.

However, there was a significant decline in the interest coverage ratio starting in July 2021, hitting a low of 2.21 in January 2021. This substantial decrease may raise concerns about the company's ability to service its debt obligations using its operating income during this period.

Subsequently, there was a modest recovery in the interest coverage ratio, reaching 34.36 in February 2024. This improvement suggests that Ross Stores Inc has made efforts to enhance its operating performance and stabilize its ability to cover interest payments.

In conclusion, Ross Stores Inc's interest coverage ratio has displayed some fluctuations over the analyzed periods, with a recent uptick indicating a potential improvement in the company's financial health. It would be essential to monitor future financial reports to assess whether this positive trend continues.