SpartanNash Co (SPTN)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 110,012 | 69,706 | 112,508 | 103,782 | 37,948 |
| Interest expense | US$ in thousands | 39,887 | 22,791 | 13,851 | 18,418 | 34,548 |
| Interest coverage | 2.76 | 3.06 | 8.12 | 5.63 | 1.10 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $110,012K ÷ $39,887K
= 2.76
Interest coverage measures a company's ability to meet its interest payment obligations using its operating income. A higher interest coverage ratio indicates a stronger ability to cover interest expenses.
SpartanNash Co's interest coverage has fluctuated over the past five years. In 2023, the interest coverage ratio decreased to 2.76 from 3.06 in 2022. While the ratio is still above 1, indicating that SpartanNash Co is generating sufficient operating income to cover its interest expenses, the decrease suggests a slight weakening in this ability compared to the previous year.
Comparing the most recent ratio to earlier years, SpartanNash Co's interest coverage was notably higher in 2021 at 8.12 and 2020 at 5.63. These higher ratios indicate a stronger ability to cover interest expenses in those years. However, the ratio was significantly lower in 2019 at 1.10, indicating a potentially risky situation where the company's operating income was barely sufficient to cover its interest payments.
Overall, SpartanNash Co's interest coverage ratio has shown variability over the past five years, with the current ratio of 2.76 indicating a moderate ability to cover interest expenses based on its operating income. Investors and creditors may monitor this ratio closely to assess the company's financial health and ability to meet its debt obligations.
Peer comparison
Dec 31, 2023