Topbuild Corp (BLD)
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 | 886,343 | 900,097 | 798,851 | 462,586 | 355,546 |
| Interest expense | US$ in thousands | 2,881 | 74,614 | 56,716 | 29,143 | 32,456 |
| Interest coverage | 307.65 | 12.06 | 14.09 | 15.87 | 10.95 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $886,343K ÷ $2,881K
= 307.65
Topbuild Corp's interest coverage has been consistently strong over the years based on the provided data. The interest coverage ratio measures the company's ability to meet its interest obligations on outstanding debt.
As of December 31, 2020, the interest coverage ratio was 10.95, indicating that the company generated 10.95 times more operating income than the interest expenses incurred during that period. This shows a healthy buffer for covering interest payments.
The ratio improved further to 15.87 as of December 31, 2021, suggesting an even stronger ability to cover interest expenses. This continued to be the case in the following years with ratios of 14.09, 12.06, and a significant spike to 307.65 as of December 31, 2024.
The substantial increase in the interest coverage ratio in 2024 could be due to various reasons such as a significant increase in operating income or a decrease in interest expenses. Overall, the trend in Topbuild Corp's interest coverage ratio indicates a robust financial position and a solid ability to meet its interest obligations.