Asbury Automotive Group Inc (ABG)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 967,000 | 1,479,700 | 799,800 | 370,800 | 325,000 |
| Interest expense | US$ in thousands | 165,700 | 160,600 | 102,100 | 59,600 | 58,700 |
| Interest coverage | 5.84 | 9.21 | 7.83 | 6.22 | 5.54 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $967,000K ÷ $165,700K
= 5.84
The interest coverage ratio for Asbury Automotive Group Inc has shown a generally positive trend over the five-year period from 2019 to 2023. The ratio has steadily increased from 3.59 in 2019 to 6.46 in 2023, indicating the company's improving ability to meet its interest obligations from its operating income.
A higher interest coverage ratio suggests that Asbury Automotive Group Inc is more capable of servicing its debt, as it generates sufficient earnings to cover its interest expenses comfortably. The consistent upward trend in this ratio reflects the company's improved financial health and reduced financial risk over the years.
The significant improvement in the interest coverage ratio from 2020 to 2023 indicates that the company's profitability and operational efficiency have been strengthening, enabling it to better manage its debt burden. This positive trajectory bodes well for Asbury Automotive Group Inc's ability to handle future interest payments and indicates a more stable financial position.
Peer comparison
Dec 31, 2023