Asbury Automotive Group Inc (ABG)

Interest coverage

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Earnings before interest and tax (EBIT) (ttm) US$ in thousands 819,300 697,800 733,700 919,800 934,600 1,316,400 1,360,300 1,407,700 1,488,400 1,224,500 1,126,400 1,015,800 801,300 699,500 632,800 496,600 408,100 352,900 291,300 306,800
Interest expense (ttm) US$ in thousands 269,000 250,000 220,700 194,700 165,700 157,600 159,400 158,400 160,700 172,200 148,000 125,400 102,100 68,300 67,900 67,300 74,400 77,700 84,500 92,700
Interest coverage 3.05 2.79 3.32 4.72 5.64 8.35 8.53 8.89 9.26 7.11 7.61 8.10 7.85 10.24 9.32 7.38 5.49 4.54 3.45 3.31

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $819,300K ÷ $269,000K
= 3.05

Asbury Automotive Group Inc's interest coverage ratio has shown fluctuations over the past few years. The interest coverage ratio measures the company's ability to meet interest payments on its outstanding debt.

From March 31, 2020, to December 31, 2021, the interest coverage ratio steadily increased from 3.31 to 7.85, indicating an improving ability to cover interest expenses with operating income. This trend suggests the company became more efficient in generating earnings relative to its interest obligations during this period.

However, the interest coverage ratio decreased to 5.64 by December 31, 2023, and further declined to 3.05 by December 31, 2024. These decreases may signal a potential decline in Asbury Automotive Group Inc's ability to cover interest expenses with its operating income. A lower interest coverage ratio could indicate difficulties in meeting debt obligations or decreased profitability.

Overall, while there have been fluctuations in Asbury Automotive Group Inc's interest coverage ratio, it is important for investors and analysts to closely monitor this ratio to assess the company's financial health and its ability to manage debt obligations effectively.