Advance Auto Parts Inc (AAP)
Interest coverage
| Dec 31, 2023 | Oct 7, 2023 | Jul 15, 2023 | Apr 22, 2023 | Dec 31, 2022 | Oct 8, 2022 | Apr 23, 2022 | Dec 31, 2021 | Oct 9, 2021 | Jul 17, 2021 | Apr 24, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jul 11, 2020 | Apr 18, 2020 | Dec 31, 2019 | Oct 5, 2019 | Jul 13, 2019 | Apr 20, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 146,526 | 351,263 | 565,980 | 636,108 | 642,923 | 715,951 | 789,858 | 838,717 | 878,081 | 905,694 | 923,611 | 749,907 | 724,220 | 639,737 | 547,664 | 677,179 | 635,293 | 617,206 | 613,975 | 604,276 |
| Interest expense (ttm) | US$ in thousands | 37,469 | 35,353 | 27,985 | 27,985 | 37,690 | 30,331 | 18,292 | 18,292 | 17,884 | 21,222 | 21,222 | 21,222 | 19,761 | 16,279 | 16,279 | 16,279 | 21,418 | 26,051 | 26,051 | 26,051 |
| Interest coverage | 3.91 | 9.94 | 20.22 | 22.73 | 17.06 | 23.60 | 43.18 | 45.85 | 49.10 | 42.68 | 43.52 | 35.34 | 36.65 | 39.30 | 33.64 | 41.60 | 29.66 | 23.69 | 23.57 | 23.20 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $146,526K ÷ $37,469K
= 3.91
The interest coverage ratio of Advance Auto Parts Inc has been relatively high and stable over the past few years, indicating the company's strong ability to meet its interest obligations. The ratio has shown an increasing trend, demonstrating improved financial health and a lower risk of default. The company's interest coverage ratio has consistently exceeded 20 in recent quarters, reflecting a comfortable cushion to cover its interest payments. This high level of coverage suggests that Advance Auto Parts Inc has sufficient operating income to service its debt obligations and indicates a healthy financial position.
Peer comparison
Dec 31, 2023