VF Corporation (VFC)

Interest coverage

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	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	1,310,926	1,247,430	1,209,604
Interest expense (ttm)	US$ in thousands	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	12,988	36,582	61,825
Interest coverage		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	100.93	34.10	19.56

March 31, 2024 calculation

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

The interest coverage ratio measures the ability of VF Corporation to meet its interest obligations by comparing its earnings before interest and taxes (EBIT) to its interest expenses. A higher ratio indicates a stronger ability to cover interest expenses.

Analyzing VF Corporation's interest coverage over the past 20 quarters, we observe fluctuations in the ratio. The ratio ranged from a low of 0.05 on March 31, 2024, indicating a lower ability to cover interest expenses, to a high of 100.93 on December 31, 2019, signaling a significant capability to meet interest obligations.

In recent quarters, VF Corporation's interest coverage fluctuated between 0.83 and 3.81, showing some variability in its ability to cover interest expenses. The ratio on March 31, 2024, at 0.05, raises potential concerns as it indicates a significant decline in the ability to cover interest payments compared to previous quarters.

Overall, a decreasing trend in the interest coverage ratio may suggest deteriorating financial health and heightened risk of potential liquidity issues. Further monitoring and analysis of VF Corporation's financial performance and management of interest expenses are recommended to ensure sustainable operations and financial stability.