Tractor Supply Company (TSCO)
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 | 1,478,912 | 1,503,887 | 1,469,394 | 1,435,097 | 1,434,943 | 1,368,787 | 1,359,600 | 1,320,448 | 1,306,698 | 1,198,111 | 1,153,063 | 1,114,926 | 996,928 | 1,002,899 | 912,539 | 752,350 | 743,220 | 733,164 | 724,495 | 710,396 |
| Interest expense (ttm) | US$ in thousands | 46,510 | 44,803 | 41,490 | 36,244 | 30,633 | 26,934 | 26,854 | 26,458 | 26,610 | 28,154 | 29,216 | 30,953 | 28,781 | 25,532 | 23,224 | 19,962 | 19,843 | 19,452 | 19,012 | 18,814 |
| Interest coverage | 31.80 | 33.57 | 35.42 | 39.60 | 46.84 | 50.82 | 50.63 | 49.91 | 49.11 | 42.56 | 39.47 | 36.02 | 34.64 | 39.28 | 39.29 | 37.69 | 37.46 | 37.69 | 38.11 | 37.76 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,478,912K ÷ $46,510K
= 31.80
Tractor Supply Company's interest coverage ratio has shown a consistently strong performance over the past few years. The interest coverage ratio measures the company's ability to meet its interest obligations from its operating income.
Based on the data provided, we can see that the interest coverage ratio has been above 30 for all the periods listed, indicating a healthy financial position. Higher interest coverage ratios suggest that the company is generating more than enough operating income to cover its interest expenses, which is a positive sign for creditors and investors.
The trend of increasing interest coverage ratios over the years from 2019 to 2023 reflects the company's improving ability to service its debt obligations. This trend indicates that the company's profitability and earnings are growing at a faster rate than its interest expenses, which is generally seen as a positive indicator of financial health and stability.
Overall, the consistently high and increasing interest coverage ratios of Tractor Supply Company suggest that the company has a strong ability to manage its debt and interest payments, which may enhance its attractiveness to lenders and potential investors.
Peer comparison
Dec 31, 2023