VF Corporation (VFC)

Interest coverage

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Earnings before interest and tax (EBIT) (ttm) US$ in thousands -88,030 -311,799 -221,477 11,351 196,144 704,182 240,681 217,677 583,891 749,153 1,415,982 1,830,391 1,781,998 1,547,293 1,299,688 668,539 256,981 356,417 585,031 927,805
Interest expense (ttm) US$ in thousands 210,761 234,968 249,054 245,036 236,189 222,784 197,058 174,390 153,085 132,935 134,097 136,469 142,770 143,091 138,134 132,479 185,743 151,681 121,020 92,042
Interest coverage -0.42 -1.33 -0.89 0.05 0.83 3.16 1.22 1.25 3.81 5.64 10.56 13.41 12.48 10.81 9.41 5.05 1.38 2.35 4.83 10.08

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-88,030K ÷ $210,761K
= -0.42

VF Corporation's interest coverage ratio has shown a declining trend over the past few years, indicating a potential deterioration in its ability to meet interest payment obligations from operating income. The interest coverage ratio peaked at 13.41 on March 31, 2022, suggesting a significant buffer to cover interest expenses. However, the ratio has since declined, with a noticeable drop to 0.05 on March 31, 2024, indicating a potential strain on the company's ability to cover interest payments with its operating income.

The decreasing trend in the interest coverage ratio raises concerns about VF Corporation's financial health and ability to service its debt obligations. Investors and creditors may monitor this ratio closely to assess the company's risk of potential financial distress due to insufficient earnings to cover interest expenses.

It would be advisable for VF Corporation to carefully manage its debt levels and improve its profitability to enhance its interest coverage ratio and ensure financial stability and sustainability in the long term.