VF Corporation (VFC)

Interest coverage

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	11,351	217,677	1,830,390	645,090	869,553
Interest expense	US$ in thousands	245,036	174,390	136,469	135,655	92,042
Interest coverage		0.05	1.25	13.41	4.76	9.45

March 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $11,351K ÷ $245,036K
= 0.05

The interest coverage ratio of VF Corporation has fluctuated significantly over the past five years. In 2024, the interest coverage ratio was particularly low at 0.05, indicating that VF Corporation may be facing challenges in meeting its interest obligations with its operating income. This could raise concerns about the company's ability to service its debt efficiently.

In contrast, the interest coverage ratios in 2022 and 2020 were significantly higher at 13.41 and 9.45 respectively, suggesting that VF Corporation had ample operating income to cover its interest expenses comfortably during those years. This indicates a healthier financial position and lower risk of default on debt obligations.

The ratios for 2023 and 2021 fall in between these extremes, with 2021 being closer to the lower end of the spectrum. It is worth noting that a lower interest coverage ratio could indicate increased financial risk for investors and creditors, while a higher ratio suggests a stronger financial position.

Overall, the trend in VF Corporation's interest coverage ratio highlights the importance of monitoring the company's ability to meet its interest obligations, as it can provide insights into its financial health and risk level.