LKQ Corporation (LKQ)
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 | 1,030,000 | 1,456,000 | 1,350,000 | 784,000 | 895,094 |
| Interest expense | US$ in thousands | -214,000 | -78,000 | -72,000 | -104,000 | 138,504 |
| Interest coverage | — | — | — | — | 6.46 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,030,000K ÷ $-214,000K
= —
LKQ Corp's interest coverage ratio has shown fluctuations over the past five years. The ratio was highest in 2021 at 21.06, indicating a strong ability to cover its interest expenses with operating profits. This suggests the company had a comfortable buffer to meet its interest obligations.
In 2022, the interest coverage ratio remained relatively high at 18.63, indicating continued strong performance in covering interest payments. However, there was a notable decrease in 2023 to 6.71, which may raise some concerns about the company's ability to cover interest expenses with operating income.
Overall, the trend in interest coverage ratios for LKQ Corp shows a generally healthy financial position with the ability to comfortably meet its interest obligations. However, the significant decrease in 2023 warrants further investigation to understand the factors driving this decline.