United Natural Foods Inc (UNFI)
Interest coverage
| Aug 3, 2024 | Jul 29, 2023 | Jul 30, 2022 | Jul 31, 2021 | Aug 1, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 8,000 | 145,000 | 459,000 | 387,000 | -173,000 |
| Interest expense | US$ in thousands | 11,000 | 144,000 | 155,000 | 204,000 | 192,000 |
| Interest coverage | 0.73 | 1.01 | 2.96 | 1.90 | -0.90 |
August 3, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $8,000K ÷ $11,000K
= 0.73
United Natural Foods Inc's interest coverage ratio has fluctuated over the past five years. The ratio was below 1 in two of the years, indicating that the company did not generate enough operating income to cover its interest expenses during those periods. This could be a cause for concern as it suggests the company may have had difficulties meeting its interest obligations from its earnings.
In 2022, the interest coverage ratio improved to 2.96, indicating that the company's operating income was nearly three times its interest expenses. This is a positive sign as it shows the company had a comfortable buffer to cover its interest payments.
However, the interest coverage ratio dropped in the most recent year to 0.73, which is below 1 again. This indicates a potential risk as the company's operating income was insufficient to cover its interest expenses. Investors and creditors may view this unfavorably as it could signal financial distress or an increased risk of default.
Overall, United Natural Foods Inc's fluctuating interest coverage ratio suggests that the company's ability to meet its interest obligations has been inconsistent. It would be important to monitor this ratio closely in the future to assess the company's financial health and debt servicing capabilities.
Peer comparison
Aug 3, 2024