Asbury Automotive Group Inc (ABG)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 844,300 | 959,100 | 1,247,300 | 804,500 | 410,000 |
| Interest expense | US$ in thousands | 269,000 | 165,700 | 160,600 | 102,100 | 74,400 |
| Interest coverage | 3.14 | 5.79 | 7.77 | 7.88 | 5.51 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $844,300K ÷ $269,000K
= 3.14
The interest coverage ratio for Asbury Automotive Group Inc has shown fluctuating trends over the past years. As of December 31, 2020, the interest coverage ratio was reported at 5.51, indicating that the company generated operating income sufficient to cover its interest expense approximately 5.51 times.
Subsequently, the interest coverage ratio improved in the following years to 7.88 as of December 31, 2021, and 7.77 as of December 31, 2022, suggesting better ability to meet interest obligations with operating income.
However, a slight decline in the interest coverage ratio was observed as of December 31, 2023, with a value of 5.79, which may indicate some increased pressure on the company's ability to cover interest costs.
The most significant decline in the interest coverage ratio was seen in the most recent year, December 31, 2024, where the ratio dropped to 3.14. This substantial decrease may raise concerns about the company's capacity to comfortably meet its interest payments from operating profits alone.
Overall, it is crucial for stakeholders to closely monitor Asbury Automotive Group Inc's interest coverage ratio to assess the company's financial health and ability to manage its debt obligations effectively.
Peer comparison
Dec 31, 2024