Tapestry Inc (TPR)
Interest coverage
| Jun 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 | 1,140,100 | 1,178,700 | 1,200,700 | 1,171,300 | 1,172,400 | 1,147,300 | 1,090,500 | 1,135,100 | 1,175,800 | 1,187,000 | 1,134,200 | 1,060,800 | 968,000 | 428,300 | -373,900 | -400,200 | -550,800 | -99,700 | 695,600 | 709,000 |
| Interest expense (ttm) | US$ in thousands | 369,600 | 260,700 | 149,600 | 79,200 | 73,200 | 74,100 | 70,500 | 68,700 | 69,300 | 65,800 | 67,800 | 70,800 | 74,100 | 78,400 | 77,900 | 75,300 | 72,100 | 67,500 | 67,300 | 67,100 |
| Interest coverage | 3.08 | 4.52 | 8.03 | 14.79 | 16.02 | 15.48 | 15.47 | 16.52 | 16.97 | 18.04 | 16.73 | 14.98 | 13.06 | 5.46 | -4.80 | -5.31 | -7.64 | -1.48 | 10.34 | 10.57 |
June 30, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,140,100K ÷ $369,600K
= 3.08
The interest coverage ratio for Tapestry Inc has shown fluctuating trends over the periods indicated in the table. A higher interest coverage ratio indicates that the company is more capable of covering its interest expenses with its operating income.
In the most recent period, as of June 30, 2024, the interest coverage ratio was 3.08, indicating that the company generated operating income 3.08 times more than its interest expenses. This ratio has decreased from the previous period but still demonstrates the company's ability to meet its interest obligations.
Looking back at historical data, the interest coverage ratio has generally been healthy, with significant peaks observed in the past, such as in December 2021 and September 2022, when the ratios were notably high at 16.73 and 16.52, respectively. These high ratios indicate a strong ability to cover interest payments.
However, there are periods, such as in March 2021, December 2020, and previous periods, where the interest coverage ratios were negative. Negative interest coverage ratios are concerning as they indicate that the company's operating income was insufficient to cover its interest expenses, raising questions about its financial health and ability to service debt.
Overall, monitoring the interest coverage ratio is crucial for assessing Tapestry Inc's financial health and debt-servicing capability. The company should aim to maintain a healthy interest coverage ratio to ensure it can comfortably meet its interest payments and maintain the confidence of lenders and investors.
Peer comparison
Jun 30, 2024