LKQ Corporation (LKQ)
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 | 1,304,000 | 1,321,000 | 1,338,000 | 1,369,000 | 1,425,000 | 1,436,000 | 1,458,000 | 1,602,000 | 1,593,000 | 1,576,192 | 1,600,234 | 1,466,160 | 1,469,667 | 1,455,483 | 1,368,109 | 1,132,837 | 993,897 | 950,049 | 897,351 | 985,195 |
| Interest expense (ttm) | US$ in thousands | 262,000 | 260,000 | 256,000 | 242,000 | 214,000 | 177,000 | 132,000 | 96,000 | 75,000 | 63,408 | 62,408 | 62,580 | 71,759 | 81,783 | 90,965 | 100,409 | 102,161 | 109,769 | 116,563 | 126,831 |
| Interest coverage | 4.98 | 5.08 | 5.23 | 5.66 | 6.66 | 8.11 | 11.05 | 16.69 | 21.24 | 24.86 | 25.64 | 23.43 | 20.48 | 17.80 | 15.04 | 11.28 | 9.73 | 8.65 | 7.70 | 7.77 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,304,000K ÷ $262,000K
= 4.98
The interest coverage ratio of LKQ Corporation has shown a positive trend over the last few years, indicating the company's improving ability to cover its interest expenses with its operating income.
From March 31, 2020, to June 30, 2022, the interest coverage ratio steadily increased from 7.77 to 25.64, reaching its peak in June 30, 2022. This significant improvement reflects the company's strong financial performance and efficient management of its interest obligations.
However, from September 30, 2022, to December 31, 2024, the interest coverage ratio experienced a decline from 24.86 to 4.98. This downward trend suggests a potential deterioration in the company's ability to cover its interest expenses with operating income during this period.
Overall, it is essential for stakeholders to monitor LKQ Corporation's interest coverage ratio closely in the future to ensure the company maintains a healthy financial position and sustainable operations.