Sprouts Farmers Market LLC (SFM)
Interest coverage
| 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 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 350,231 | 342,663 | 345,347 | 340,241 | 358,360 | 347,873 | 343,342 | 340,482 | 334,076 | 375,625 | 368,198 | 377,311 | 391,665 | 345,648 | 306,824 | 265,393 | 217,360 | 199,184 | 212,413 | 222,782 |
| Interest expense (ttm) | US$ in thousands | 9,779 | 8,639 | 8,214 | 8,539 | 9,135 | 10,580 | 10,895 | 11,227 | 11,261 | 11,523 | 11,729 | 12,669 | 14,505 | 16,594 | 19,175 | 20,735 | 20,910 | 23,122 | 24,984 | 26,231 |
| Interest coverage | 35.81 | 39.66 | 42.04 | 39.85 | 39.23 | 32.88 | 31.51 | 30.33 | 29.67 | 32.60 | 31.39 | 29.78 | 27.00 | 20.83 | 16.00 | 12.80 | 10.40 | 8.61 | 8.50 | 8.49 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $350,231K ÷ $9,779K
= 35.81
The interest coverage ratio for Sprouts Farmers Market Inc has shown a consistent upward trend over the past 8 quarters, indicating the company's improving ability to meet its interest obligations. The ratio has increased from 29.28 in Q1 2022 to 60.01 in Q4 2023, more than doubling during this period.
This upward trend is a positive sign for investors and creditors as it reflects the company's improved earnings and cash flow relative to its interest expenses. A higher interest coverage ratio implies that the company is more capable of servicing its debt and is less vulnerable to potential financial distress due to interest payment obligations.
The significant increase in the interest coverage ratio over the quarters suggests that Sprouts Farmers Market Inc has been effectively managing its interest expenses and generating sufficient earnings to cover its interest payments. This enhanced financial health may indicate a more stable and sustainable financial position for the company in the long term.
Overall, the consistent improvement in Sprouts Farmers Market Inc's interest coverage ratio reflects positively on the company's financial performance and indicates a reduced risk of default on their interest payments.
Peer comparison
Dec 31, 2023