Genuine Parts Co (GPC)
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 | 1,272,795 | 1,507,696 | 1,663,172 | 1,725,594 | 1,803,993 | 1,725,653 | 1,680,922 | 1,722,193 | 1,646,489 | 1,651,466 | 1,519,107 | 1,353,727 | 1,284,805 | 1,183,988 | 1,203,644 | 578,238 | 479,605 | 256,666 | 267,486 | 878,712 |
| Interest expense (ttm) | US$ in thousands | 96,827 | 82,752 | 70,761 | 65,295 | 64,469 | 64,715 | 67,108 | 70,901 | 73,887 | 72,615 | 68,562 | 63,676 | 62,150 | 66,683 | 78,304 | 88,407 | 91,048 | 90,056 | 90,719 | 88,516 |
| Interest coverage | 13.15 | 18.22 | 23.50 | 26.43 | 27.98 | 26.67 | 25.05 | 24.29 | 22.28 | 22.74 | 22.16 | 21.26 | 20.67 | 17.76 | 15.37 | 6.54 | 5.27 | 2.85 | 2.95 | 9.93 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,272,795K ÷ $96,827K
= 13.15
Genuine Parts Co's interest coverage ratio, calculated as earnings before interest and taxes (EBIT) divided by interest expenses, provides an indication of the company's ability to cover its interest obligations with its operating income.
The trend of Genuine Part Co's interest coverage ratio shows fluctuation over the years. In March 2020, the interest coverage was 9.93, indicating that the company's EBIT was nearly 10 times its interest expense, demonstrating a strong ability to meet its interest obligations. However, the ratio decreased in the following quarters, dropping to 2.95 in June 2020 and further to 2.85 in September 2020, signaling a potential strain on the company's ability to cover its interest payments with its operating earnings.
Subsequently, there was an improvement in the interest coverage ratio, reaching 27.98 by December 31, 2023, showing a significant enhancement in the company's ability to service its debt. However, the ratio decreased in the following periods, falling to 13.15 by December 31, 2024, suggesting a potential decrease in the company's ability to cover its interest expenses with its operating income.
Overall, Genuine Parts Co's interest coverage ratio has shown variability over the period analyzed, with fluctuations indicating changes in the company's financial performance and its ability to meet its interest obligations.