Cars.com Inc (CARS)

Interest coverage

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	54,116	58,992	64,573	67,624	66,036	50,287	42,462	42,732	48,338	60,173	67,162	34,283	-887,327	-898,518	-1,365,297	-1,347,069	-446,060	-426,896	49,151	72,704
Interest expense (ttm)	US$ in thousands	3,042	3,098	3,154	3,200	3,235	3,287	3,333	3,342	3,360	5,201	5,388	5,386	5,108	3,034	2,318	1,818	1,573	1,295	1,296	1,301
Interest coverage		17.79	19.04	20.47	21.13	20.41	15.30	12.74	12.79	14.39	11.57	12.47	6.37	-173.71	-296.15	-589.00	-740.96	-283.57	-329.65	37.93	55.88

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $54,116K ÷ $3,042K
= 17.79

The interest coverage ratio for Cars.com has fluctuated over the past eight quarters. It has shown a general increasing trend from Q1 2022 to Q2 2023, reaching a peak of 1.98 in Q1 2023 before slightly decreasing in the most recent quarter to 1.67. This indicates that the company's ability to cover its interest expenses with its operating income has improved over time, but there has been a slight decline in the most recent quarter. The average interest coverage ratio over this period is 1.61, suggesting that, on average, the company's operating income is able to cover its interest expenses 1.61 times. Overall, while the recent decrease in the interest coverage ratio warrants monitoring, the company has shown improvements in its ability to meet its interest obligations in recent quarters.