Cars.com Inc (CARS)
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 | 54,116 | 66,036 | 48,338 | -887,327 | -446,060 |
| Interest expense | US$ in thousands | 3,042 | 3,235 | 3,360 | 5,108 | 1,573 |
| Interest coverage | 17.79 | 20.41 | 14.39 | -173.71 | -283.57 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $54,116K ÷ $3,042K
= 17.79
Cars.com's interest coverage ratio has displayed fluctuations over the past five years, as shown in the table. The interest coverage ratio indicates the company's ability to fulfill its interest obligations from operating earnings.
In 2023, the interest coverage ratio stood at 1.67, indicating that the company's operating earnings were sufficient to cover its interest expenses 1.67 times over. This represents a slight decrease from the previous year's figure of 1.87.
Looking back to 2021, the interest coverage ratio improved to 1.25, showing progress compared to the lower ratios of 0.49 in 2020 and 0.50 in 2019.
The trend in the interest coverage ratio suggests that the company's ability to cover interest payments has been inconsistent over the years, with fluctuations that may raise concerns regarding the stability of the company's financial position. Further analysis of the company's financial performance and capital structure would be necessary to assess the underlying reasons for these fluctuations and to evaluate the overall financial health of Cars.com.
Peer comparison
Dec 31, 2023