US Foods Holding Corp (USFD)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,099,000 | 1,002,000 | 616,000 | 427,000 | -56,000 |
| Interest expense | US$ in thousands | 9,000 | 324,000 | 255,000 | 213,000 | 238,000 |
| Interest coverage | 122.11 | 3.09 | 2.42 | 2.00 | -0.24 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,099,000K ÷ $9,000K
= 122.11
Based on the data provided, the interest coverage ratio of US Foods Holding Corp has shown a significant improvement over the years. The interest coverage ratio was negative at -0.24 as of December 31, 2020, indicating that the company was not generating enough operating income to cover its interest expenses. However, the ratio improved to 2.00 as of December 31, 2021, and further increased to 2.42 as of December 31, 2022.
The trend continued to show improvement, with the interest coverage ratio reaching 3.09 as of December 31, 2023, and remarkably surging to 122.11 as of December 31, 2024. A high interest coverage ratio indicates that the company is comfortably able to meet its interest obligations from its operating income.
This positive trend in the interest coverage ratio suggests that US Foods Holding Corp's financial health has strengthened over the years, as the company's ability to service its debt obligations has significantly improved. It also demonstrates that the company's profitability and cash flow generation have been sufficient to cover its interest expenses, which can be reassuring for investors and creditors.
Peer comparison
Dec 31, 2024