Starbucks Corporation (SBUX)
Interest coverage
| 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 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 5,530,200 | 5,993,400 | 6,206,400 | 5,951,900 | 5,441,800 | 5,151,300 | 4,800,100 | 4,712,900 | 5,854,700 | 6,064,100 | 6,074,300 | 5,825,800 | 4,025,000 | 1,809,600 | 1,297,700 | 1,604,800 | 2,137,700 | 4,592,100 | 4,997,400 | 4,802,000 |
| Interest expense (ttm) | US$ in thousands | 562,000 | 564,800 | 560,500 | 550,100 | 532,200 | 514,400 | 497,200 | 482,800 | 478,100 | 468,400 | 464,300 | 469,700 | 474,000 | 481,400 | 465,600 | 436,800 | 407,600 | 373,200 | 347,900 | 331,000 |
| Interest coverage | 9.84 | 10.61 | 11.07 | 10.82 | 10.23 | 10.01 | 9.65 | 9.76 | 12.25 | 12.95 | 13.08 | 12.40 | 8.49 | 3.76 | 2.79 | 3.67 | 5.24 | 12.30 | 14.36 | 14.51 |
September 30, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $5,530,200K ÷ $562,000K
= 9.84
The interest coverage ratio for Starbucks Corporation has shown some fluctuations over the past few quarters. The ratio indicates the company's ability to cover its interest expenses with its operating income.
From Dec 31, 2019, to Jun 30, 2020, the interest coverage ratio was relatively high, ranging from 12.30 to 14.51, which suggests that Starbucks had a comfortable margin of safety in meeting its interest obligations during that period.
However, there was a significant drop in the ratio from Sep 30, 2020, to Mar 31, 2021, with the ratio falling to as low as 2.79. This indicates a potential strain on Starbucks' ability to cover its interest expenses with its operating income during that period.
Subsequently, there was a gradual improvement in the interest coverage ratio from Mar 31, 2021, to Sep 30, 2024, reaching levels between 9.65 to 11.07. While the ratios have improved since the low point in early 2021, they have not returned to the high levels seen in 2020.
Overall, the trend in Starbucks Corporation's interest coverage ratio shows variability, with periods of strong coverage followed by periods of lower coverage. It is important for investors and stakeholders to monitor this ratio to assess the company's ability to meet its interest obligations in the future.
Peer comparison
Sep 30, 2024