Genuine Parts Co (GPC)
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 | 1,806,820 | 1,646,490 | 1,262,500 | 277,919 | 925,298 |
| Interest expense | US$ in thousands | 64,469 | 73,887 | 62,150 | 91,048 | 91,405 |
| Interest coverage | 28.03 | 22.28 | 20.31 | 3.05 | 10.12 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,806,820K ÷ $64,469K
= 28.03
The interest coverage ratio for Genuine Parts Co. has shown a consistent upward trend over the past five years, reflecting the company's improved ability to meet its interest payment obligations. The ratio increased from 11.46 in 2019 to 27.10 in 2023, indicating a strong capacity to cover interest expenses with operating income. This steady improvement suggests that Genuine Parts Co. has been effectively managing its debt and generating sufficient earnings to comfortably meet its interest obligations. Overall, the increasing trend in the interest coverage ratio indicates a positive financial performance and lower financial risk for Genuine Parts Co.