Copart Inc (CPRT)

Interest coverage

		Jul 31, 2023	Jul 31, 2022	Jul 31, 2021	Jul 31, 2020	Jul 31, 2019
Earnings before interest and tax (EBIT)	US$ in thousands	1,486,570	1,375,000	1,136,430	821,069	724,761
Interest expense	US$ in thousands	1	5	65	20,230	19,810
Interest coverage		1,486,570.00	275,000.00	17,483.54	40.59	36.59

July 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $1,486,570K ÷ $1K
= 1,486,570.00

The interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt. It is calculated by dividing earnings before interest and taxes (EBIT) by the interest expense. A higher ratio indicates a more comfortable ability to cover interest expenses.

In the case of Copart, Inc., the interest coverage has shown a consistent and positive trend over the past five years. The company's interest coverage ratio has increased from 40.74 in July 2019 to 82.39 in July 2022, signaling a strengthening ability to cover its interest expenses. This improvement suggests that Copart has been generating more than sufficient operating income to cover its interest obligations, reflecting a positive financial position. However, it's worth noting that the most recent data is missing and might impact the trend analysis. Overall, the trend in Copart's interest coverage ratio indicates an increasingly robust ability to meet its interest payments, which is generally a positive sign for investors and lenders.