Constellation Brands Inc Class A (STZ)

Interest coverage

		Feb 28, 2025	Nov 30, 2024	Aug 31, 2024	May 31, 2024	Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	128,000	1,165,800	1,142,900	3,352,200	2,677,200	2,455,800	2,410,000	517,200	781,500	989,300	947,800	2,100,900	664,100	657,800	1,554,300	2,072,700	3,531,800	3,579,100	1,831,500	472,800
Interest expense (ttm)	US$ in thousands	411,400	413,600	413,400	420,000	435,400	450,200	444,700	428,400	398,700	367,400	356,700	358,200	356,400	360,300	368,000	372,400	385,700	395,300	402,700	414,100
Interest coverage		0.31	2.82	2.76	7.98	6.15	5.45	5.42	1.21	1.96	2.69	2.66	5.87	1.86	1.83	4.22	5.57	9.16	9.05	4.55	1.14

February 28, 2025 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $128,000K ÷ $411,400K
= 0.31

The interest coverage ratio of Constellation Brands Inc Class A has experienced fluctuations over the observed period. The ratio, which indicates the company's ability to cover its interest expenses with its operating income, was at a relatively low point of 1.14 as of May 31, 2020. However, it improved significantly to 9.16 by February 28, 2021, showing a strong ability to meet its interest obligations.

Subsequently, the interest coverage ratio exhibited some volatility, with fluctuations in the range of 1.21 to 7.98 up to August 31, 2024. Particularly noteworthy were the lower ratios observed on November 30, 2021 (1.83) and February 28, 2023 (1.96), implying a potential strain on the company's ability to cover interest payments during those periods.

Overall, while there have been fluctuations in Constellation Brands Inc Class A's interest coverage ratio, it is important to monitor the trend over time to assess the company's ability to manage its interest obligations effectively and sustainably.