Copart Inc (CPRT)

Interest coverage

		Jul 31, 2024	Apr 30, 2024	Jan 31, 2024	Oct 31, 2023	Jul 31, 2023	Apr 30, 2023	Jan 31, 2023	Oct 31, 2022	Jul 31, 2022	Apr 30, 2022	Jan 31, 2022	Oct 31, 2021	Jul 31, 2021	Apr 30, 2021	Jan 31, 2021	Oct 31, 2020	Jul 31, 2020	Apr 30, 2020	Jan 31, 2020	Oct 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	1,572,023	1,603,096	1,584,817	1,570,442	1,486,569	1,420,745	1,374,576	1,356,379	1,374,997	1,351,704	1,307,060	1,217,953	1,136,426	1,041,711	911,203	862,970	821,069	805,956	817,806	778,017
Interest expense (ttm)	US$ in thousands	43,494	0	1	1	1	1	1	3	5	10	25	46	65	4,962	10,749	15,640	20,230	19,930	19,451	19,770
Interest coverage		36.14	—	1,584,817.00	1,570,442.00	1,486,569.00	1,420,745.00	1,374,576.00	452,126.33	274,999.40	135,170.40	52,282.40	26,477.24	17,483.48	209.94	84.77	55.18	40.59	40.44	42.04	39.35

July 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,572,023K ÷ $43,494K
= 36.14

The interest coverage ratio for Copart Inc has shown significant variability over the past few quarters. In the most recent quarter ended July 31, 2024, the interest coverage ratio stood at a healthy 36.14, indicating that the company generated sufficient operating income to cover its interest expenses by 36 times. This suggests a strong ability to meet interest obligations from operating profits.

However, in the quarter ended Jan 31, 2024, the interest coverage ratio was notably high at 1,584,817.00, which may be due to unusual or non-recurring factors distorting the calculation. This extreme value should be interpreted with caution as it may not reflect the company's typical financial performance.

In the quarters preceding April 2024, Copart Inc maintained consistent and stable interest coverage ratios above 40, indicating a robust ability to service its debt obligations. In contrast, earlier quarters such as Oct 31, 2021, and July 31, 2021, displayed comparatively lower interest coverage ratios, indicating potential financial strain during those periods.

Overall, the trend in Copart Inc's interest coverage ratio fluctuates significantly, but the recent strong ratios suggest a healthy financial position with the ability to comfortably cover interest expenses. Monitoring this ratio over time will be essential to track the company's financial health and debt servicing capacity.