Dorman Products Inc (DORM)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 216,564 | 171,783 | 171,928 | 136,335 | 106,038 |
| Interest expense | US$ in thousands | 48,061 | 15,582 | 2,162 | 599 | 231 |
| Interest coverage | 4.51 | 11.02 | 79.52 | 227.60 | 459.04 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $216,564K ÷ $48,061K
= 4.51
Interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt obligations. A higher ratio indicates that the company is better positioned to cover its interest expenses.
Dorman Products Inc's interest coverage ratio has fluctuated over the past five years, ranging from 4.47 in 2023 to 79.35 in 2021. The significant drop in the ratio from 2021 to 2023 indicates a decrease in the company's ability to cover its interest expenses. It went from a robust coverage of nearly 80 times in 2021 to 4.47 times in 2023, which might raise concerns about the company's ability to meet its interest obligations comfortably.
However, it's important to note the absence of data for 2020 and 2019, which limits the trend analysis over a longer period. In conclusion, while the company's recent interest coverage ratio has declined, further analysis and comparison with industry benchmarks would provide a clearer picture of Dorman Products Inc's financial health and ability to manage its debt obligations effectively.
Peer comparison
Dec 31, 2023