O’Reilly Automotive Inc (ORLY)

Interest coverage

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	—	3,186,380	2,954,490	2,917,170	2,419,340
Interest expense	US$ in thousands	222,548	201,668	157,720	144,768	161,126
Interest coverage		0.00	15.80	18.73	20.15	15.02

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $—K ÷ $222,548K
= 0.00

The interest coverage ratio for O’Reilly Automotive Inc has displayed a generally positive trend over the specified period. As of December 31, 2020, the interest coverage ratio stood at 15.02, indicating the company's ability to cover its interest expenses 15 times over with its earnings before interest and taxes (EBIT). This ratio improved over the following years, reaching 20.15 on December 31, 2021, and staying relatively strong at 18.73 on December 31, 2022.

However, there was a slight decline in the interest coverage ratio to 15.80 on December 31, 2023, which may raise some concerns about the company's ability to cover its interest obligations. Notably, the most recent data point on December 31, 2024, shows an interest coverage ratio of 0.00, which is likely due to an exceptionally low EBIT relative to the interest expenses.

In conclusion, while O'Reilly Automotive Inc generally exhibited a healthy interest coverage ratio during the period under review, the significant drop in the ratio in 2024 warrants further investigation and monitoring to ensure the company's financial health and ability to meet its interest obligations in the future.