US Foods Holding Corp (USFD)
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 | 1,002,000 | 924,000 | 933,000 | 764,000 | 616,000 | 558,000 | 480,000 | 455,000 | 427,000 | 318,000 | 261,000 | 76,000 | -56,000 | 87,000 | 191,000 | 442,000 | 695,000 | 691,000 | 685,000 | 698,000 |
| Interest expense (ttm) | US$ in thousands | 324,000 | 319,000 | 303,000 | 281,000 | 255,000 | 235,000 | 220,000 | 214,000 | 213,000 | 218,000 | 231,000 | 240,000 | 238,000 | 235,000 | 215,000 | 194,000 | 184,000 | 169,000 | 168,000 | 174,000 |
| Interest coverage | 3.09 | 2.90 | 3.08 | 2.72 | 2.42 | 2.37 | 2.18 | 2.13 | 2.00 | 1.46 | 1.13 | 0.32 | -0.24 | 0.37 | 0.89 | 2.28 | 3.78 | 4.09 | 4.08 | 4.01 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,002,000K ÷ $324,000K
= 3.09
Interest coverage ratio measures the company's ability to pay its interest expenses on outstanding debt. A higher ratio indicates that the company is more capable of meeting its interest obligations. Looking at the trend for US Foods Holding Corp over the past several quarters, the interest coverage has been fluctuating.
In the most recent quarter, as of December 31, 2023, the interest coverage ratio was 3.09, which indicates that the company earned 3.09 times the amount needed to cover its interest expenses. This is a positive sign as it shows an improvement compared to the previous quarter and suggests the company has a better ability to meet its interest obligations.
However, it's important to note that there have been periods, such as in the first quarter of 2021 and earlier, where the interest coverage ratio was below 1, indicating that the company was not generating enough earnings to cover its interest expenses. This could be a concern as it suggests the company may have had difficulty meeting its debt obligations during those periods.
Overall, based on the historical data provided, US Foods Holding Corp has shown variable interest coverage ratios. Investors and creditors should continue monitoring this ratio to ensure the company's ability to meet its debt obligations remains stable and sustainable.
Peer comparison
Dec 31, 2023