Group 1 Automotive Inc (GPI)
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 | 908,300 | 964,100 | 1,093,300 | 861,000 | 471,200 |
| Interest expense | US$ in thousands | 249,800 | 163,900 | 104,800 | 83,400 | 102,100 |
| Interest coverage | 3.64 | 5.88 | 10.43 | 10.32 | 4.62 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $908,300K ÷ $249,800K
= 3.64
Group 1 Automotive Inc's interest coverage has shown fluctuations over the years based on the data provided. The interest coverage ratio measures the company's ability to meet its interest payments on outstanding debt. In December 2020, the interest coverage ratio was 4.62, indicating that the company's earnings before interest and taxes were sufficient to cover its interest expenses 4.62 times over.
By December 2021, the interest coverage ratio improved significantly to 10.32, reflecting a stronger ability to meet interest obligations. This positive trend continued into December 2022, with an interest coverage ratio of 10.43, suggesting continued financial stability.
However, the interest coverage ratio dropped to 5.88 by December 2023, which could indicate that the company's earnings may have been insufficient to cover interest expenses, potentially signaling increased financial risk.
Finally, by December 2024, the interest coverage ratio further declined to 3.64, which may raise concerns about the company's ability to pay its interest obligations from its operational earnings alone. The decreasing trend in the interest coverage ratio over the years may warrant further investigation into Group 1 Automotive Inc's financial health and debt management strategies to ensure sustainable operations in the long term.
Peer comparison
Dec 31, 2024