Starbucks Corporation (SBUX)
Interest coverage
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 5,530,200 | 5,951,800 | 4,713,000 | 5,825,700 | 1,605,000 |
| Interest expense | US$ in thousands | 562,000 | 550,100 | 482,900 | 469,800 | 437,000 |
| Interest coverage | 9.84 | 10.82 | 9.76 | 12.40 | 3.67 |
September 30, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $5,530,200K ÷ $562,000K
= 9.84
Interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio indicates a stronger ability to meet interest obligations.
From 2020 to 2021, Starbucks' interest coverage ratio increased significantly from 3.67 to 12.40, showing a substantial improvement in its ability to cover interest expenses. However, in the following years, the ratio slightly declined, but remained at healthy levels above 9. This indicates that Starbucks continued to have a strong ability to cover its interest expenses with operating income, demonstrating financial stability and robust operational performance.
Overall, Starbucks' interest coverage ratios over the past five years suggest that the company has been effectively managing its debt obligations and generating sufficient operating income to comfortably cover its interest expenses.
Peer comparison
Sep 30, 2024