US Foods Holding Corp (USFD)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,002,000 | 616,000 | 427,000 | -56,000 | 695,000 |
| Interest expense | US$ in thousands | 324,000 | 255,000 | 213,000 | 238,000 | 184,000 |
| Interest coverage | 3.09 | 2.42 | 2.00 | -0.24 | 3.78 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,002,000K ÷ $324,000K
= 3.09
The interest coverage ratio for US Foods Holding Corp has shown some fluctuations over the five-year period from 2019 to 2023. In general, the interest coverage ratio indicates the company's ability to meet its interest obligations with its earnings before interest and taxes (EBIT).
In 2019, the interest coverage ratio was robust at 3.78, indicating that the company's EBIT was sufficient to cover its interest expenses almost four times over. However, in 2020, the interest coverage ratio dropped significantly to -0.24, which implies that the company's EBIT was insufficient to cover its interest expenses, signaling a potential financial distress situation.
Over the following years, there was an improvement in the interest coverage ratio. By 2021, the ratio had increased to 2.00, showing some recovery from the previous year's low point. This positive trend continued in 2022, with the ratio further improving to 2.42.
Finally, in 2023, the interest coverage ratio reached 3.09, indicating a healthier position compared to the previous years. A ratio of 3.09 suggests that the company's EBIT is able to cover its interest expenses approximately three times over, demonstrating improved financial stability.
Overall, while there were fluctuations in the interest coverage ratio over the five-year period, the general trend seems to show a recovery and improved ability of US Foods Holding Corp to meet its interest obligations with its operating earnings.
Peer comparison
Dec 31, 2023