Walmart Inc (WMT)

Interest coverage

		Jan 31, 2024	Jan 31, 2023	Jan 31, 2022	Jan 31, 2021	Jan 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	27,012,000	20,428,000	25,942,000	22,548,000	20,568,000
Interest expense	US$ in thousands	2,585,000	2,043,000	1,906,000	2,274,000	2,568,000
Interest coverage		10.45	10.00	13.61	9.92	8.01

January 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $27,012,000K ÷ $2,585,000K
= 10.45

The interest coverage ratio for Walmart Inc has been fairly stable over the past five years, ranging from 8.01 to 13.61. This ratio indicates the company's ability to meet its interest obligations with its earnings before interest and taxes.

Walmart Inc's interest coverage ratio of 10.45 for the fiscal year ending January 31, 2024, suggests that the company generated operating income 10.45 times greater than its interest expenses in that period. This implies that Walmart Inc has a strong ability to cover its interest payments with its operating earnings.

The consistent and high level of interest coverage ratios across the years signifies a healthy financial position for Walmart Inc, indicating that the company has been effectively managing its debt obligations and generating sufficient operating income to service its interest payments. It also suggests that Walmart Inc is less vulnerable to financial distress caused by fluctuations in interest rates or operating performance.

Overall, the trend of stable and relatively high interest coverage ratios indicates that Walmart Inc has a strong financial footing and is well-equipped to handle its interest obligations in the foreseeable future.