Cars.com Inc (CARS)

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 67,295 65,073 42,922 42,606 50,530 65,289 61,385 67,569 58,642 37,800 43,362 43,632 46,976 58,811 65,800 32,921 -897,828 -907,097 -1,372,974 -1,355,137
Interest expense (ttm) US$ in thousands 32,197 32,712 32,461 32,502 32,425 32,613 33,337 34,234 35,320 36,245 37,266 38,058 38,729 40,989 42,246 40,331 37,856 34,014 30,947 30,734
Interest coverage 2.09 1.99 1.32 1.31 1.56 2.00 1.84 1.97 1.66 1.04 1.16 1.15 1.21 1.43 1.56 0.82 -23.72 -26.67 -44.37 -44.09

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $67,295K ÷ $32,197K
= 2.09

The interest coverage ratio for Cars.com Inc has shown a significant improvement over the period from March 31, 2020, to December 31, 2024. At the beginning of the period, the company had a negative interest coverage indicating that its operating income was insufficient to cover its interest expenses. However, starting from March 31, 2021, the interest coverage turned positive and continued to increase gradually over the subsequent quarters.

The interest coverage ratio reached its lowest point at -44.09 in March 31, 2020, and improved steadily to reach a peak of 2.09 in December 31, 2024. This positive trend indicates that Cars.com Inc's operating income has consistently become more capable of covering its interest expenses.

Overall, the improving interest coverage ratio reflects positively on the company's ability to meet its interest obligations and suggests better financial health and stability for Cars.com Inc over the analyzed period.