Tractor Supply Company (TSCO)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 1,467,532 | 1,483,418 | 1,499,723 | 1,497,597 | 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 |
| Interest expense (ttm) | US$ in thousands | 54,592 | 49,337 | 45,001 | 45,732 | 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 |
| Interest coverage | 26.88 | 30.07 | 33.33 | 32.75 | 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 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,467,532K ÷ $54,592K
= 26.88
Tractor Supply Company's interest coverage ratio has shown a generally positive trend over the period from March 31, 2020, to December 31, 2024. The interest coverage ratio measures the company's ability to pay its interest expenses on outstanding debt using its operating income.
The interest coverage ratio for Tractor Supply Company fluctuated between approximately 37.69 and 50.82 during this period. It peaked at 50.82 on September 30, 2022, indicating a strong ability to cover interest payments with operating income. However, the ratio declined slightly in subsequent quarters but remained relatively high.
The company's interest coverage ratio decreased to 26.88 on December 31, 2024, which might be a cause for concern as it indicates a lower ability to cover interest expenses with operating income compared to the previous periods. A declining interest coverage ratio could suggest potential financial risk if the trend continues, as it may imply increasing difficulty in meeting debt obligations.
Overall, Tractor Supply Company has maintained a healthy interest coverage ratio throughout the period, but stakeholders should monitor any further changes in this ratio to assess the company's financial health and ability to manage its debt obligations effectively.
Peer comparison
Dec 31, 2024