Dorman Products Inc (DORM)

Interest coverage

		Dec 31, 2024	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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	322,115	305,652	289,579	259,198	209,621	207,685	194,769	197,811	226,136	201,572	193,961	179,734	177,189	177,960	179,747	153,862	134,673	110,660	91,550	102,657
Interest expense (ttm)	US$ in thousands	39,727	41,897	44,350	46,713	48,061	47,175	37,304	26,304	15,582	6,384	4,773	3,208	1,977	733	0	0	0	0	0	0
Interest coverage		8.11	7.30	6.53	5.55	4.36	4.40	5.22	7.52	14.51	31.57	40.64	56.03	89.63	242.78	—	—	—	—	—	—

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $322,115K ÷ $39,727K
= 8.11

Based on the data provided, Dorman Products Inc's interest coverage ratio has shown a decreasing trend over the period from March 31, 2020, to December 31, 2024. The interest coverage ratio measures the company's ability to cover its interest expenses with its operating income.

The interest coverage ratio was not calculable for the periods up to September 30, 2021, as the interest expenses were not indicated. Starting from September 30, 2021, the interest coverage ratio was 242.78, indicating a very comfortable position to cover interest expenses. However, this ratio experienced a significant decline to 8.11 by December 31, 2024.

The decreasing trend in the interest coverage ratio suggests that Dorman Products Inc may be becoming relatively less capable of servicing its interest expenses with its earnings over time. This trend could raise concerns about the company's financial health and its ability to manage debt obligations. Investors and creditors may closely monitor this ratio to assess the company's financial stability and risk level in relation to its debt.