DR Horton Inc (DHI)

Interest coverage

		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	Dec 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	6,407,700	6,741,300	6,725,700	6,446,800	6,468,800	6,515,300	6,902,400	7,527,900	7,754,100	7,412,000	6,652,500	5,951,900	5,493,200	4,830,900	4,196,800	3,641,000	3,129,500	2,732,500	2,580,300	2,417,400
Interest expense (ttm)	US$ in thousands	203,700	196,900	199,800	199,900	203,500	203,100	185,700	171,800	162,500	149,800	147,500	148,700	152,200	156,000	156,300	156,000	153,300	148,700	148,800	146,200
Interest coverage		31.46	34.24	33.66	32.25	31.79	32.08	37.17	43.82	47.72	49.48	45.10	40.03	36.09	30.97	26.85	23.34	20.41	18.38	17.34	16.53

September 30, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $6,407,700K ÷ $203,700K
= 31.46

DR Horton Inc's interest coverage ratio has shown a generally strong and improving trend over the past few years. The company's ability to cover its interest expenses has been consistently high, with the ratio consistently above 20, indicating a comfortable buffer to meet its interest obligations.

From Dec 2019 to Sep 2024, the interest coverage ratio has steadily increased from 16.53 to 31.46. This upward trend suggests that DR Horton Inc's operating income has been more than sufficient to cover its interest expenses in recent periods.

The company's interest coverage ratio peaked at 49.48 in Jun 2022, indicating that DR Horton Inc had nearly 50 times the operating income to cover its interest expenses during that period. This high level of interest coverage reflects strong financial health and suggests that the company has a robust ability to service its debt obligations.

Overall, DR Horton Inc's interest coverage ratio demonstrates a financially sound position, with a consistent ability to cover interest expenses comfortably and an improving trend over the analyzed period.