Group 1 Automotive Inc (GPI)

Interest coverage

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	968,600	1,015,900	1,034,200	1,047,900	1,091,400	1,079,100	1,040,700	1,018,700	884,400	814,400	760,000	576,500	495,700	432,500	328,700	346,800	363,700	341,900	336,800	348,900
Interest expense (ttm)	US$ in thousands	114,400	103,400	96,500	89,100	86,800	78,800	72,400	67,600	64,000	62,400	63,800	66,300	70,600	70,600	76,400	79,211	80,030	78,054	76,794	77,197
Interest coverage		8.47	9.82	10.72	11.76	12.57	13.69	14.37	15.07	13.82	13.05	11.91	8.70	7.02	6.13	4.30	4.38	4.54	4.38	4.39	4.52

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $968,600K ÷ $114,400K
= 8.47

Group 1 Automotive, Inc. has demonstrated a consistent and impressive performance in terms of interest coverage over the past eight quarters. The interest coverage ratio has shown a declining trend from Q1 2022 to Q4 2023, indicating that the company's ability to meet its interest obligations from its operating income has been gradually decreasing. However, it is important to note that even the lowest interest coverage ratio of 6.11 in Q4 2023 is still relatively healthy and indicates that Group 1 Automotive, Inc. has sufficient earnings to cover its interest expenses by more than six times. This suggests that the company has a strong financial position and is capable of servicing its debt obligations comfortably. Furthermore, the consistently high interest coverage ratios above 6.00 over the past eight quarters reflect the company's solid financial management and profitability, instilling confidence in its ability to generate enough income to meet its interest payments in the future.