O’Reilly Automotive Inc (ORLY)

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 3,186,380 2,954,490 2,917,170 2,419,340 1,920,730
Interest expense US$ in thousands 208,868 163,220 151,768 171,326 152,975
Interest coverage 15.26 18.10 19.22 14.12 12.56

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $3,186,380K ÷ $208,868K
= 15.26

O`Reilly Automotive, Inc.'s interest coverage ratio has exhibited a generally positive trend over the past five years. The interest coverage ratio measures the company's ability to meet its interest obligations on its debt using its operating income. A higher interest coverage ratio indicates a stronger ability to cover interest expenses.

In 2021, the company's interest coverage ratio was the highest at 20.43, indicating that O`Reilly Automotive had a comfortable cushion to cover its interest payments. This was followed by 2019 and 2022, with ratios of 13.98 and 19.32, respectively, which also demonstrated strong interest coverage.

Although there was a slight decrease in 2023 to 16.19, the ratio still remains at a level that provides confidence in the company's ability to meet its interest payments. In 2020, the ratio was 15.25, which was lower compared to the other years but still above the industry average.

Overall, the trend of increasing interest coverage ratios up to 2021 followed by a slight decrease in 2023 indicates that O`Reilly Automotive, Inc. has been effectively managing its interest obligations relative to its operating income. This suggests a sound financial position and ability to service its debt comfortably.


Peer comparison

Dec 31, 2023

Company name
Symbol
Interest coverage
O’Reilly Automotive Inc
ORLY
15.26
Advance Auto Parts Inc
AAP
1.30
AutoZone Inc
AZO
MarineMax Inc
HZO
1.73

See also:

O’Reilly Automotive Inc Interest Coverage