O’Reilly Automotive Inc (ORLY)

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	2,396,168	2,374,304	2,369,245	3,227,964	3,192,128	3,155,609	3,061,775	3,001,606	2,954,491	2,951,230	2,902,438	2,902,879	2,926,682	2,786,004	2,758,676	2,701,818	2,427,531	2,333,854	2,143,531	1,900,907
Interest expense (ttm)	US$ in thousands	222,548	223,293	219,488	214,244	201,668	187,851	179,654	167,451	157,720	150,121	141,830	142,103	144,768	148,385	155,180	159,246	161,126	158,065	152,255	145,070
Interest coverage		10.77	10.63	10.79	15.07	15.83	16.80	17.04	17.93	18.73	19.66	20.46	20.43	20.22	18.78	17.78	16.97	15.07	14.77	14.08	13.10

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $2,396,168K ÷ $222,548K
= 10.77

The interest coverage ratio for O’Reilly Automotive Inc has shown a generally increasing trend from March 31, 2020, to June 30, 2022, indicating the company's improving ability to cover its interest payments with operating income. The ratio peaked at 20.46 on June 30, 2022, which suggests the company had more than enough operating income to cover its interest expenses during that period.

However, starting from September 30, 2022, the interest coverage ratio began to decline gradually, indicating a potential decrease in the company's ability to cover its interest obligations. By December 31, 2024, the interest coverage ratio decreased to 10.77, reaching its lowest point in the period, which could imply a higher burden of interest payments relative to the operating income.

Overall, despite the fluctuations in the interest coverage ratio, O’Reilly Automotive Inc maintained a relatively healthy interest coverage position during the analyzed period, which could be a crucial factor for evaluating the company's financial health and its ability to meet debt obligations.