Landstar System Inc (LSTR)

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	344,149	393,916	447,066	509,534	571,083	595,489	593,403	565,233	505,668	441,340	392,280	302,213	252,950	235,057	223,343	272,013	298,904	318,473	334,903	337,478
Interest expense (ttm)	US$ in thousands	244	497	655	1,725	3,263	3,189	3,113	3,114	3,141	3,179	3,277	3,376	3,489	3,619	5,596	4,796	3,907	3,020	1,005	1,781
Interest coverage		1,410.45	792.59	682.54	295.38	175.02	186.73	190.62	181.51	160.99	138.83	119.71	89.52	72.50	64.95	39.91	56.72	76.50	105.45	333.24	189.49

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $344,149K ÷ $244K
= 1,410.45

Landstar System Inc's interest coverage ratio has shown considerable variability over the past few quarters, ranging from a low of 39.91 in June 2020 to a high of 1,410.45 in December 2023. The interest coverage ratio measures the company's ability to meet its interest obligations from its operating income.

A higher interest coverage ratio indicates that the company is more capable of covering its interest expenses with its operating profits. Landstar System Inc's interest coverage ratio experienced a significant improvement in the most recent quarter, suggesting that the company's operating income was significantly higher compared to its interest expenses.

However, it is important to note that the interest coverage ratio can be influenced by various factors such as changes in interest rates, operating income, and debt levels. Therefore, it is essential for investors and analysts to consider the trend of the interest coverage ratio over time and compare it to industry benchmarks to assess the company's financial health and risk of default.