Walgreens Boots Alliance Inc (WBA)
Interest coverage
| Aug 31, 2024 | May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | Feb 29, 2020 | Nov 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | -6,909,000 | -6,293,000 | -6,809,000 | 657,000 | -4,359,000 | -4,728,000 | -4,534,000 | -4,293,000 | 4,706,000 | 6,552,000 | 8,385,000 | 8,435,000 | 4,115,000 | 3,547,000 | -44,000 | 2,000 | 1,424,000 | 1,504,000 | 4,475,000 | 4,787,000 |
| Interest expense (ttm) | US$ in thousands | 481,000 | 505,000 | 565,000 | 568,000 | 579,000 | 529,000 | 464,000 | 423,000 | 399,000 | 382,000 | 819,000 | 856,000 | 906,000 | 968,000 | 571,000 | 590,000 | 620,000 | 591,000 | 630,000 | 655,000 |
| Interest coverage | -14.36 | -12.46 | -12.05 | 1.16 | -7.53 | -8.94 | -9.77 | -10.15 | 11.79 | 17.15 | 10.24 | 9.85 | 4.54 | 3.66 | -0.08 | 0.00 | 2.30 | 2.54 | 7.10 | 7.31 |
August 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-6,909,000K ÷ $481,000K
= -14.36
The interest coverage ratio for Walgreens Boots Alliance Inc has fluctuated significantly over the past few years. From November 2019 to February 2020, the company had a positive interest coverage ratio, indicating that it had more than enough earnings to cover its interest expenses. However, the ratio turned negative in May 2020 and remained negative through August 2024, suggesting that the company's earnings were insufficient to cover its interest payments during this period.
The negative interest coverage ratios are a red flag as they indicate that the company's earnings were not enough to cover its interest expenses, which could lead to financial distress or bankruptcy. This could be a result of declining profitability, high debt levels, or both. On the positive side, there was a notable improvement in the interest coverage ratio in November 2023, when the ratio turned positive again, indicating that the company's earnings had improved sufficiently to cover its interest expenses.
Overall, the trend in interest coverage for Walgreens Boots Alliance Inc shows volatility and inconsistency in its ability to meet its interest obligations. This highlights the importance of monitoring the company's financial performance closely to ensure its long-term financial health and stability.
Peer comparison
Aug 31, 2024
See also:
Walgreens Boots Alliance Inc Interest Coverage (Quarterly Data)