Lithia Motors Inc (LAD)
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 | 1,692,400 | 1,941,100 | 1,662,500 | 692,700 | 495,000 |
| Interest expense | US$ in thousands | 207,900 | 135,400 | 114,400 | 78,100 | 62,900 |
| Interest coverage | 8.14 | 14.34 | 14.53 | 8.87 | 7.87 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,692,400K ÷ $207,900K
= 8.14
Lithia Motors, Inc.'s interest coverage ratio fluctuated over the past five years, indicating variability in its ability to cover interest expenses with operating profits. The interest coverage ratio decreased from 12.80 in 2021 to 4.81 in 2023. A higher interest coverage ratio reflects a company's better ability to meet interest obligations. The significant decrease in 2023 compared to the previous years may suggest a potential weakening in the company's ability to cover its interest payments from its earnings. This fluctuation should be closely monitored by stakeholders as it could indicate changes in the company's financial health and risk profile.
Peer comparison
Dec 31, 2023