Fastenal Company (FAST)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,510,000 | 1,532,800 | 1,454,300 | 1,217,500 | 1,142,400 |
| Interest expense | US$ in thousands | 7,300 | 10,800 | 14,300 | 9,700 | 9,700 |
| Interest coverage | 206.85 | 141.93 | 101.70 | 125.52 | 117.77 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,510,000K ÷ $7,300K
= 206.85
Based on the provided data, Fastenal Company's interest coverage ratio has shown a generally positive trend over the years. The interest coverage ratio indicates the company's ability to cover its interest expenses with its earnings before interest and taxes (EBIT).
As of December 31, 2020, Fastenal Company's interest coverage ratio was 117.77, reflecting a strong ability to cover its interest obligations. This ratio increased to 125.52 by December 31, 2021, indicating further improvement in the company's ability to cover its interest expenses.
By December 31, 2022, the interest coverage ratio slightly decreased to 101.70, which may indicate a slight decrease in the company's ability to cover its interest payments with its operating income. However, a ratio above 1 generally indicates that the company is capable of servicing its debt obligations.
The ratio then saw a significant increase, reaching 141.93 by December 31, 2023, suggesting an improvement in Fastenal Company's ability to cover its interest expenses.
Lastly, as of December 31, 2024, the interest coverage ratio surged to 206.85, indicating a substantial increase in the company's ability to cover its interest obligations with its operating income. This significant improvement suggests that Fastenal Company has strong earnings relative to its interest expenses, which is a positive sign for creditors and investors.
In conclusion, Fastenal Company's interest coverage ratio has shown a positive trend over the years, generally indicating a strong ability to meet its interest obligations with its operating income.
Peer comparison
Dec 31, 2024