Builders FirstSource Inc (BLDR)

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	1,595,203	1,781,539	1,995,144	2,082,733	2,176,319	2,211,888	2,584,790	3,373,588	3,770,210	3,865,995	3,688,852	3,003,220	2,387,371	1,979,475	1,281,846	730,863	543,854	405,098	394,972	381,362
Interest expense (ttm)	US$ in thousands	207,724	201,413	197,343	198,343	192,115	187,550	181,468	199,167	198,373	196,424	188,267	145,347	135,877	124,495	116,584	115,601	135,688	134,266	134,011	136,581
Interest coverage		7.68	8.85	10.11	10.50	11.33	11.79	14.24	16.94	19.01	19.68	19.59	20.66	17.57	15.90	11.00	6.32	4.01	3.02	2.95	2.79

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,595,203K ÷ $207,724K
= 7.68

The interest coverage ratio measures a company's ability to meet its interest obligations with its operating income. Builders FirstSource Inc's interest coverage ratio has shown a generally improving trend from March 31, 2020, to December 31, 2022, indicating the company's increasing ability to cover its interest expenses. The ratio increased from 2.79 on March 31, 2020, to 19.01 on December 31, 2022, peaking at 20.66 on March 31, 2022.

However, there was a slight decline in the interest coverage ratio from March 31, 2022, onwards, falling to 7.68 on December 31, 2024. This may indicate a potential decrease in the company's ability to cover its interest expenses using its operating income. It is thus essential for stakeholders to monitor this ratio closely to ensure that Builders FirstSource Inc's financial health remains stable and sustainable.