NVR Inc (NVR)

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	1,956,127	2,047,027	2,046,377	2,154,675	2,292,718	2,151,109	2,052,762	1,897,228	1,643,520	1,602,052	1,487,826	1,276,447	1,118,905	1,022,234	962,557	994,214	1,051,175	1,033,013	1,015,453	1,012,355
Interest expense (ttm)	US$ in thousands	27,754	27,979	28,154	33,616	39,524	45,832	51,873	52,886	53,117	53,084	51,528	47,783	40,872	34,269	28,875	25,651	25,380	25,082	24,986	25,014
Interest coverage		70.48	73.16	72.69	64.10	58.01	46.93	39.57	35.87	30.94	30.18	28.87	26.71	27.38	29.83	33.34	38.76	41.42	41.19	40.64	40.47

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,956,127K ÷ $27,754K
= 70.48

The interest coverage ratio measures a company's ability to meet its interest payment obligations based on its earnings before interest and taxes (EBIT). A higher interest coverage ratio indicates a stronger ability to cover interest expenses.

Looking at the data provided for NVR Inc., the interest coverage ratio for Q4 2023 is 72.75. This indicates that the company's EBIT is sufficient to cover its interest expenses 72.75 times over.

It is noted that there is missing data for interest coverage ratios in the other quarters of 2023. However, in Q4 2022, the interest coverage ratio was exceptionally high at 1,629.03, suggesting a very robust ability to cover interest payments. Similarly, in Q2 2022, the interest coverage ratio was 5,171.26, and in Q1 2022, it was 1,332.65.

Based on the available data, NVR Inc. has historically shown a strong ability to cover its interest expenses with its earnings, as evidenced by the high interest coverage ratios in the periods where data is provided. This indicates a healthy financial position in terms of meeting interest obligations.