LGI Homes (LGIH)

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	166,903	226,745	229,546	228,645	235,963	218,324	230,625	323,863	397,362	498,223	541,584	526,559	550,285	574,379	514,256	436,846	368,459	286,365	273,246	264,046
Interest expense (ttm)	US$ in thousands	0	6,297	27,875	49,993	56,290	56,484	49,030	30,918	28,451	21,960	7,836	3,830	0	0	0	0	0	0	0	0
Interest coverage		—	36.01	8.23	4.57	4.19	3.87	4.70	10.47	13.97	22.69	69.11	137.48	—	—	—	—	—	—	—	—

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $166,903K ÷ $0K
= —

The interest coverage ratio measures a company's ability to meet its interest expenses with its operating income. In the case of LGI Homes, the interest coverage ratio was not available (indicated by "—") for the period ending March 31, 2020, to September 30, 2021.

From March 31, 2022, onwards, the interest coverage ratio for LGI Homes started to be positive. The ratio has shown a consistent improvement from 137.48 as of March 31, 2022, to 4.19 as of December 31, 2023. This indicates that the company's operating income has been relatively strong enough to cover its interest expenses during these periods.

However, there was a slight increase in the interest coverage ratio in the following periods, with ratios ranging from 4.57 to 36.01 between March 31, 2024, and September 30, 2024. This suggests that LGI Homes may have experienced fluctuations in its operating income or interest expenses during these periods.

Overall, the trend in LGI Homes' interest coverage ratio over the available periods shows fluctuations but generally indicates an ability to cover its interest expenses with operating income. Tracking this ratio over time can help assess the company's financial health and ability to meet its debt obligations.